Ansoff Matrix Flashcards
What are the 4 strategies of the Ansoff matrix?
Market penetration
Market development
product development
diversification
Each time you move into a new quadrant (horizontally or vertically)…
risk increases
Market penetration is
the safest of the four
Market penetration focuses…
- on expanding sales of existing
products in an existing market - you know the product works and the market holds few surprises for you
Constraints on Market Penetration
- retaliation from competitors
- legal constraints
- economic constraints
Product development is
slightly riskier and can be expensive
product development focuses on
introducing a new product into an existing market
Product development may require
new resources and strategic capabilities, and typically involves project management risks
Market development involves
putting an existing product into an entirely new market
market development can be done by
finding a new use for the product or by adding new features or benefits to it
Diversification is
the riskiest of the four
diversification involves
introducing a new, unproven product into an entirely new market that you may not fully understand
Consolidation…
refers to a strategy by which an organisation focuses defensively on their current markets with current products.
Consolidation protects and reinforces…
the company position on the current markets with the current products.
sustaining company position means investments (innovation, marketing, services…)
retrenchment
refers to a strategy of withdrawal from marginal activities in order to concentrate on the most valuable segments and products within their existing business.
