Omar Effindi Ansoff

Ansoff’s Matrix

Ansoff’s Growth Vector matrix helps a business to understand the business development and/or marketing strategy that it should use to enable growth. It may consider existing markets, or new markets in which to sell its products or services, or existing products or services, or new products or services to sell to customers.

Prior to using the Ansoff Matrix your organization should conduct a SWOT analysis. The SWOT analysis serves to identify the strengths and weaknesses of your organization, as well as the external threats to it and the opportunities available to it. Once these have been identified you can use the Handoff Matrix to investigate the implications of your organization’s current strategy and those of any changes that are suggested by the SWOT analysis. The usefulness of both the SWOT analysis and Ansoff’s Matrix depends on the quality and Accuracy of the market intelligence they are based on. This information is best supplied by working managers who can provide accurate and up-to-date information on every-Thing from customer feedback to competitor activities.

There will be differing levels of risks and opportunities associated with each of the strategies. The detail below refer to products, but they could also apply to services, such as those offered for example by banks, insurance companies or utility companies.

1. Market Penetration Strategy:

This strategy seeks business growth through selling existing products in existing market. For this reason it is a low risk strategy, as the firm is not risking developing new products or venturing into markets. The strategy works in a growing market, where simply maintaining market share will result in growth.

2. Market Development:

In this strategy the business targets new markets, or new areas of the market, by selling more of the same product to a new customer. For example,

(a) Selling in different geographical areas (new countries/regions);

(b) Selling through different sales...