What is the Ansoff Matrix?
The Ansoff Matrix, also known as the Product-Market Expansion Grid, is a strategic planning tool that helps businesses evaluate and plan their growth strategies. It was introduced by Russian-American mathematician and business theorist Igor Ansoff in 1957. The matrix is designed to guide companies in making decisions about their product and market growth based on two key dimensions: products and markets.
Strategies of Ansoff Matrix
The 1957 Ansoff Matrix, developed by Igor Ansoff, helps firms analyse and plan growth plans. It describes four growth strategies: Market Penetration, Market Development, Product Development, and Diversification. Market Penetration involves offering more products or services to current markets to increase market share. Market Development is entering new markets with existing products or services to increase the client base. Product Development meets changing client needs by generating new items or services for current markets. Diversification, the riskiest method, involves entering new markets with new products or services to grow and diversify revenue. Businesses can use the Ansoff Matrix to evaluate the risks and benefits of each strategy and make decisions that match their goals and market conditions.
Geeky Takeaways:
- Market Penetration involves increasing the sales volume of established products in existing markets.
- Market Development includes the introduction of established products into new markets.
- Product Development involves the introduction of novel products into established markets.
- Diversification involves the introduction of fresh products or services into unexplored markets.
- The Ansoff Matrix facilitates the evaluation of development strategy risks and rewards.