Ansoff matrix Flashcards
What is ansoff matrix
decision-making tool, used to devise product and market growth strategies for an organization.
Consists of existing products and markets and new products and markets or one of both
What is market penetration
existing markets with existing products
What is market development
This growth strategy involves selling existing products in new or unexplored markets.
What is product development
This growth strategy involves introducing new products to existing customers.
If focuses on product differentiation in order to remain competitive or to improve its competitiveness.
Typically, products are developed to replace their existing ones (e.g., the latest iPhone) or to extend the product range (e.g., iTunes, iPads, and Apple Watch) and marketed at current customers.
It is a medium-risk growth strategy because product development can incur substantial investment costs, such as the expenditure on market research (to find out what customers want), prototyping, and test marketing.
What is diversification
Diversification involves organizations moving into new markets with new products, e.g., Honda lawnmowers, Lenovo smartwatches, IKEA’s infamous meatballs
What is the characteristic that satisfies existing markets with existing products
market penetration
What is the characteristic that satisfies existing products in new or unexplored markets.
market development
What is the characteristic that satisfies introducing new products to existing customers.
product development
What is the characteristic that satisfies moving into new markets with new products
diversification
Characteristics of market penetration
Low risk
Familiar markets
Changing marketing mix
Reposition brands
Competitors retaliate
Characteristics of market development
Medium risk
Familiar product
New supply chains
Changing marketing mix
Unknown markets
Characteristics of product development
Medium risk
Product extension
Product development
Acquisition
Brand extension
Characteristics of diversification
High risk
Spread risks
New products
New markets
Loss of focus on core
