ANSOFF MATRIX

Introduction

• The Ansoff Matrix is a strategic planning tool.

• Developed by Igor Ansoff.

• It illustrates the relationship between risk and growth strategies.

Purpose

• Shows the degree of risk associated with four strategies of growth:

  • Market Penetration

  • Market Development

  • Product Development

  • Diversification

Growth Strategies

Market Penetration

• Objective: Achieve higher market share in existing markets with existing products.

• Focuses on increasing sales through tactics like advertising or pricing strategies.

Product Development

• Involves the development and sale of new products or modifying existing products.

• Targeted at existing markets.

• Emphasis on innovation and enhancement of product offerings.

Market Development

• Strategy of selling existing products to new markets.

• Can involve targeting different demographics or expanding geographically.

Diversification

• Refers to the process of selling different, unrelated goods or services in new markets.

• Involves entering a new industry which can be risky but offers potential for high rewards.