Ansoff's Matrix is a classic model of marketing and business strategy that business students can use very effectively in their exams. This revision presentation outlines the key features of the model.

1. Ansoff’s
Matrix

2. Ansoff Matrix
A marketing planning
model that helps a
business determine its
product and market
strategy

3. Ansoff Matrix – the Grid

4. How does the Ansoff Matrix work?
• Ansoff’s matrix suggests that a business’
growth strategy depends on whether it
markets new or existing products in
new or existing markets
• The output from the matrix is a series of
four suggested growth strategies which
set the direction for the business
strategy

5. Ansoff is Everywhere!

6. Market penetration – main aims
• Maintain or increase the
market share of current
products
• Secure dominance of
growth markets
Business
• Restructure a mature as
market by driving out
competitors usual
• Increase usage by existing
customers

7. Evaluating market penetration
• The business is focusing on markets and
products it knows well
• It is likely to have good information on
competitors and on customer needs
• Unlikely to need significant new market
research
• But will the strategy deliver enable the
firm to achieve its growth objectives?

8. Product development
A growth strategy where
growth
a business aims to
a business to
introduce new products
introduce new products
into existing markets
into existing markets

9. Evaluating product development
• A strategy that often plays to the
strengths of an established business
• Strong emphasis on effective market
research (insights into customer needs)
and successful innovation
• A great way of exploiting the existing
customer base
• Being first to market is important

10. Market development
A growth strategy
where the business
seeks to sell its
existing products into
new markets

11. Different approaches to market development
• New geographical markets; e.g.
exporting
• New product dimensions or packaging
(e.g. sizes, flavours, features)
• New distribution channels (e.g. using e-
commerce and mail order)
• Different pricing policies to attract
different customers

12. Evaluating market development
• Often more risky than product
development
• Existing products may not suite new
markets (exporting often problematic)
• A logical strategy where existing
markets are saturated or in decline
• Significant government support for this
strategy – particularly keen to
encourage international trade

13. Diversification
The growth strategy
The growth strategy
where a business
where a business
markets new products in
markets new products in
new markets
new markets

14. Evaluating diversification
• Inherently risky strategy
– No direct experience of the product or market
– Few economies of scale (initially)
– However, if successful, overall risk of the
business is spread
• Approaches
– Innovation & R&D: develop new solutions
– Acquire an existing business in the market
– Extend an existing brand into the market

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