Ansoff's Matrix Flashcards
What is Strategic Direction?
The general path a business takes, based on its mission and achieving its objectives.
What does the strategic direction influence?
How a business’s strategy develops and affects all areas.
What does market penetration mean?
Existing products being sold to existing markets
What does product development mean?
Selling new products in existing markets
What does market development mean?
Taking existing products into new markets
What does diversification mean?
Inventing new products for new markets
Example for market penetration?
Generic products
Example for product development?
New iPhone every year
Example for market development?
Demographically or geographically
Example for diversification?
Virgin in the travel sector
What is Ansoff’s matrix?
A tool for comparing the level of risk involved with the different growth strategies
What does Ansoff’s Matrix help managers with?
To decide on a direction for strategic growth
What is an advantage of Ansoff’s Matrix?
Forces managers to think about expected risks of moving in a certain direction
What is an disadvantage of Ansoff’s Matrix?
Fails to show that market development and diversification also tend to require significant change in to the day-to-day workings for the business.
What is the least risky strategy?
Market Penetration
