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    Ansoff's Matrix:: Strategies For Growth

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    Yogesh Singh
    Ansoff's Matrix outlines four strategies for business growth: market penetration, product development, market development, and diversification. These strategies differ in their levels of risk based on whether a company is offering existing or new products in existing or new markets. Market penetration has the lowest risk by selling more of current products to current customers, while diversification has the highest risk as it involves entering new markets with new products. The matrix provides a framework for managers to evaluate their growth options and determine the appropriate strategy based on balancing potential rewards with risks.

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    Ansoff's Matrix:: Strategies For Growth

    Uploaded by

    Yogesh Singh
    380 views11 pages
    Ansoff's Matrix outlines four strategies for business growth: market penetration, product development, market development, and diversification. These strategies differ in their levels of risk based on whether a company is offering existing or new products in existing or new markets. Market penetration has the lowest risk by selling more of current products to current customers, while diversification has the highest risk as it involves entering new markets with new products. The matrix provides a framework for managers to evaluate their growth options and determine the appropriate strategy based on balancing potential rewards with risks.

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    Ansoff Matrix

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    Ansoff's Matrix outlines four strategies for business growth: market penetration, product development, market development, and diversification. These strategies differ in their levels of risk based on whether a company is offering existing or new products in existing or new markets. Market penetration has the lowest risk by selling more of current products to current customers, while diversification has the highest risk as it involves entering new markets with new products. The matrix provides a framework for managers to evaluate their growth options and determine the appropriate strategy based on balancing potential rewards with risks.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    380 views11 pages

    Ansoff's Matrix:: Strategies For Growth

    Uploaded by

    Yogesh Singh
    Ansoff's Matrix outlines four strategies for business growth: market penetration, product development, market development, and diversification. These strategies differ in their levels of risk based on whether a company is offering existing or new products in existing or new markets. Market penetration has the lowest risk by selling more of current products to current customers, while diversification has the highest risk as it involves entering new markets with new products. The matrix provides a framework for managers to evaluate their growth options and determine the appropriate strategy based on balancing potential rewards with risks.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 11

    Ansoffs Matrix:

    Strategies for Growth

    Background
    Long-term business strategy is dependant on planning for their introduction Ansoff Matrix represents the different options open to a marketing manager when considering new opportunities for sales growth

    This well known marketing tool was first published in the Harvard Business Review (1957) in an article called 'Strategies for Diversification'. It is used by marketers who have objectives for growth. Ansoff's matrix offers strategic choices to achieve the objectives. There are four main categories for selection

    Variables in the matrix


    Two variables in Strategic marketing Decisions:
    The market in which the firm was going to operate The product intended for sale

    In terms of the market, managers had two options:


    Remain in the existing market Enter new ones

    In terms of the product, the two options are:


    selling existing products developing new ones

    Existing
    Existing

    PRODUCTS

    New

    MARKET PENETRATION Sell more in existing Markets

    INCREASING RISK

    PRODUCT DEVELOPMENT
    INCREASING RISK Sell new products in existing markets

    MARKETS MARKET EXTENSION Achieve higher sales/market share of existing products in new markets DIVERSIFICATION Sell new products in new markets

    New

    MARKET PENETRATION
    This is the objective of higher market share in existing markets
    E.g. in 2000, Mitsubishi announced a 10% reduction in prices in the UK in order to encourage purchases

    MARKET EXTENSION
    This is the strategy of selling an existing product to new markets. This could involve selling to an overseas market, or a new market segment
    Maruti -A star( Europe)

    PRODUCT DEVELOPMENT
    This involves taking an new product and developing it in existing markets
    E.g. Coca-Cola. This has been developed to have vanilla, lime, cherry and diet varieties (amongst others) in the SOFT DRINKS market Auto products

    DIVERSIFICATION
    This is the process of selling different, unrelated goods or services in unrelated markets
    Related Diversification Unrelated Diversification

    This is the most risky of all four strategies


    E.g. the kingfisher group

    Summary
    Risks involved differ substantially The matrix identifies different strategic areas in which a business COULD expand Managers need to then asses the costs, potential gains and risks associated with the other options

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