Igor Ansoff created the Product / Market diagram in as a method to classify options for business expansion. The simplisity of this model is. Learn how to apply Ansoff’s Matrix to understand the risk of different strategic Sometimes called the Product/Market Expansion Grid, the Matrix (see figure 1. The Product Market Expansion Grid, also called the Ansoff Matrix, is a tool used to develop business growth strategies by examining the.

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Use different sales channels, such as online or direct sales if you are currently selling through the trade. Managing the Risks of Business Growth.

This is where they can use a strategic approach, such as the Ansoff Matrix, to screen their options, so that they can choose the ones that best suit their situations. Therefore, a firm should choose this option only when the current product grrid current market orientation does not offer further opportunities for growth. Initial market entry Phase 2: Defensive reasons may be spreading the risk of market contraction, or being forced to diversify when current product or current market orientation seems to provide no further anssoff for growth.

THE ANSOFF MATRIX The Ansoff Matrix (Product/Market Expansion Grid) was invented by H. Igor Ansoff.

I like the manner of explaining it. This involves developing new products for existing markets by thinking about how new products can meet customer needs more closely and outperform competitors.

That said, there is no one best strategy to select, with each offering different benefits to companies in various circumstances.

We think you have liked this presentation. But how does a business decide upon the best strategy for growth? Offensive reasons may be conquering new positions, taking opportunities that promise greater profitability than expansion opportunities, or using retained cash that exceeds total expansion needs. To find out more, including how to control cookies, see here: You are commenting using your Twitter account.


It assumes that an innovation will be accepted by the organization’s existing customer group. An organization that already has a market for its products might try and follow a strategy of developing additional products, aimed at its current market.

This too assists marketers in the development of expxnsion expansion strategies. Many prestige car manufacturers offer a range of merchandise targeted at car owners so that you can buy replica models, clothing and pens. Each time one moves into a new quadrant horizontally or vertically downwards risk is increased. In order to make a worthwhile analysis it is also important to consider other factors, such as the condition of the market.

Leave a Reply Cancel reply Enter your comment here The product-market expansion rxpansion consists of a vertical axis representing markets current and newa horizontal axis representing products current and newand four cells that identify the four basic growth alternatives: Published by Julius Austin Modified about 1 year ago.

Target different groups of people, perhaps with different age groups, genders or demographic profiles from your normal grdi.

Horizontal integration refers to a strategy of selling ownership or. Makret long term viability of hospitals, clinics, home health agencies and other healthcare entities largely depends markett the successful identification and exploitation of growth opportunities. Management may expect great economic value growth, profitability or first and foremost great coherence and complementary to their current activities exploitation of know-how, more efficient use of available resources and capacities.

Market penetration is considered a low risk method to grow the business. Registration Forgot your password? I will be reading the case study on Virgin after this. Share buttons are a little bit lower. Chapter 8 — Producing and Marketing Goods and Services.

Coca-Cola: Ansoff Matrix | the Marketing Agenda

International development phases Phase 1: It involves increasing market share within existing market segments. When companies have no previous industry nor market experience this strategy is called unrelated diversification.


It also focuses on whether a market is new or existing. Describe Ansoff matrix Igor Ansoff developed a strategic decision-making tool Ansoff matrix to analyze the different options. If you wish to download it, please recommend it to your friends in any social system. The Matrix essentially shows the risk that a particular strategy will expose entrepreneurs to. Feedback Privacy Policy Feedback. Healthcare marketers must strive to proactively monitor their surroundings to, among other things, detect growth opportunities that can be exploited.

Buy a competitor company particularly in mature markets. For example, Coca-Cola has had little need to diversify relative to the Virgin brand which traditionally operates in uncertain markets such as the volatile airline industry, meaning diversification actually spreads risk. Local market expansion Phase 3: Entrepreneurs can penetrate the market by finding new customers for your product or by getting current customers to use more of their products.

This strategy assumes that existing markets are fully exploited or that new markets can be developed concurrently with existing markets. The launch of Coke Zero in was a classic example of this — its concept being identical to Diet Coke; the great taste of Coca-Cola but with zero sugar and low calories.

Diversification is the riskiest of the four growth strategies. NEW Market, NEW Product This involves the production of a new category of goods that complements the existing portfolio, in order to penetrate a new but related market.

Introduce a loyalty scheme. They are Good article, Ansoff demonstrate very much clarified.

In order to measure the chances of success, different tests can be done: Diversification Diversification is a growth strategy that involves the introduction of new products into new markets.

Therefore, the company puts itself in a great uncertainty. Ansoff pointed out that a diversification strategy stands apart from the other three strategies.