Ansoff Matrix

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Table of content
The executive summary…………………………………………………….. 2 1. History of Ansoff Matrix.………………………………………………… 3 2. Introduction………………………………………………………………. . 3 3. Model Use and the Applicability………………………………………….. 5

3.1 Market Penetration…………………………………………........ 5
3.2 Market development…………………………………………….. 7
3.3 Product Development………………………………………….. .. 7
3.4 Diversification………………………………………………… … 9 4. The Advantages…………………………………………………………… 12 5. The Risks……….……………………………………………………… … 12 6. Conclusion………………………………………………………………… 13 7. References…………………………………………………………………. 14 18. Appendix

8.1 Appendix 1……………………………………………………… 16

8.2 Appendix 2…………………………………………………….. 16

8.3 Appendix 3……………………………………………………… 17

Executive Summary

This report discuss about the Ansoff Matrix. The matrix contains 4 strategies;

1.Market Penetration
Selling more of the same to the same types of people

2.Product Development
Selling new products to existing customers

3.Market Development
Selling the existing products to new types of consumer

4.Diversification
Selling new products to new consumer

In this report each strategy will be discussed on when to implement the strategy, the risk level of the strategy and the overall conclusion made from the research about the Ansoff matrix.

1.0 History of Ansoff Matrix

The Ansoff Matrix was developed by Igor Ansoff. He was called the Pioneer and Father of Strategic Management. Igor Ansoff was an author of more than 120 published papers and articles. His research focus in three areas; the concept of environmental turbulence; the contingent success paradigm and real-time strategic management.

The Ansoff matrix was created by Igor Ansoff as a marketing tool. It was first published in his article “Strategies for Diversification” in the Harvard Business Review in 1957. The matrix gives the marketers several options to grow their business. (Ciper system’s competitive Intelligence Consulting 2006)

2.0 Introduction

Figure : Ansoff Matrix

When a business decides to grow or venture further into the market, the Ansoff matrix can help the business to decide on its product and market growth strategy. As you can see the Ansoff matrix covers the two important dimensions; the Product and Market.

The Ansoff Matrix offers 4 generic growth strategies. They are:

5.Market Penetration
Selling more of the same to the same types of people

6.Product Development
Selling new products to existing customers

7.Market Development
Selling the existing products to new types of consumer

8.Diversification
Selling new products to new consumer

To give a clearer explanation of the theory being used, the product; Crocs (See Appendix 1) and the Disney Company will serve as examples.

Market Penetration: Crocs focused on their original market, Canada and Us (The March of Crocs, 2007)

Market Development: Crocs decide to venture into other market, such Europe Us (The March of Crocs, 2007)

Product Development: After the market has been saturated for the original crocs, they have launched accessories, bags and t-shirts. (See Appendix 2)

Diversification: Crocs have no plans to diversify. Walt Disney built parks and resorts to reach to a new market. (Their previous market focuses mainly on children, with the parks and resorts; it targets another market, which is the adults market.)

3.0 Model Use and Applicability

The Ansoff matrix is a series of suggested growth strategies that sets the direction for the business. The applicability and use of each strategy are discussed below.

3.1 Market Penetration

Market penetration occurs when a company enters a market with current products. The company itself might already have an existing product and they would like to increase the sales of the product or market share with this strategy.

The aims of the strategy are:

To maintain or...
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