Business Tool #9 Ansoff Matrix Flashcards
Ansoff Matrix
A decision-making tool that examines four strategies in terms of goods and services offered by a business to meet customer wants and needs in markets the company operates in.
Ansoff Matrix in simpler terms
it gives managers more data (HL-students, think of Scientific Decision Making) to judge risk before making a decision and strategy to expand or develop new products/services.
Market Penetration
Existing, nothing is new and not changing anything
Low Risk
- changing the item a little bit to make it a little more attractive
- Ex: limited editions, new colors
Most common, effective, cheaper to do
Product Developement
New Product + Exisiting
Medium Risk
Market = Product Development
focuses on a strategy on creating something new to realise into market that is already familiar with
(higher cost and medium risk)
Ex: coca-cola releasing a new drink (diet coke)
Playstation, releasing new consoles
somewhat pricey due to R&D
Market Development
Existing Product + New Product
Medium Risk
A business taking a successful product and releasing it to a new market
medium cost and medium risk
Ex: Coca-cola attempting to break into Chinese Market (somewhat successful)
Nissan released in North America (Highly successful)
Diversification
New Product + New Market
company focuses on something completely new
considered to be high cost and high risk as it involves heavy R&D costs and Market Research
Ex:
cola releasing baby formula
Nissan creating electric weheelchairs for eldery
