Ansoff's Matrix

Ansoff's Matrix



The Ansoff Matrix is a strategic planning tool that provides a framework to help executives, senior managers and marketers devise strategies for future growth.



     Market penetration
In market penetration strategy, the organisation tries to grow using its existing offerings (products and services) in existing markets.

• Advertise, to encourage more people within your existing market to choose your product, or to use more of it
• Introduce a loyalty scheme
• Special offer promotions
• Increase your sales force activities
• Buy a competitor company

Market development

In market development strategy, a firm tries to expand into new markets (geographies, countries etc.) using its existing products.

• Target different geographical markets at home or abroad
• Use different sales channels, such as online or direct sales if you are currently selling through the trade
• Target different groups of people, perhaps different age groups, genders or demographic profiles from your normal customers.

   Product development

In product development strategy, a company tries to create new products and services targeted at its existing markets to achieve growth.

• Extend your product range by producing different variants, or packaging existing products it in new ways.
• Develop related products or services (for example, a toothpaste producer starts selling mouthwash).

    Diversification

In diversification an organisation tries to grow their introducing new offerings in new markets. It is the most risky strategy since both product and market development is required.

There’s often little scope for using existing expertise or achieving economies of scale, because you are trying to sell completely different products or services to different customers.

Its main advantage is that if the new business fails, the other is unlikely to be affected.
Ansoff's Matrix and McDonald's. Details here.