Ansoff Matrix

Question 1

What is Ansoff Matrix?

Answer 1

Tool for business’s that want to grow quickly and have growth objective. Used to identify appropriate corporate strategy and identify level of risk associated with chosen strategy.

Question 2

How does the Ansoff Matrix model work?

Answer 2

Considers 4 elements broken into 2 categories:
- Market (Existing and New)
- Product (Existing and new)

Market Penetration (Existing Market)
Market Development (New Market)
Diversification (Existing Product)
Product Development (New Product)

Question 3

What is market penetration?

Answer 3

Least risky strategy to achieve growth to pursue strategy of market penetration, involves selling more products to existing customers by encouraging:
- More regular use of product
- Increased usage of the product
- Established Brand loyalty of consumers

Question 4

What is market development?

Answer 4

Finding and exploiting new market opportunities for existing products by:
- Entering foreign markets
- Repositioning product by selling to different customer profiles
- Seeking complementary locations

Question 5

What is product development?

Answer 5

Involves selling new or improved product for existing customers by:
- Developing new versions or upgrades of existing successful products
- Redesigning packaging and aesthetic features
- Relaunching Seasonal / Heritage products at commercially convenient intervals

Question 6

What is diversification?

Answer 6

Most risky growth strategy as it involves targeting new customers with new or redeveloped products.