Ansoff Matrix
(**Ansoff
is used to develop a marketing strategy. Unlike some of the other analytical
tools used in marketing, the matrix is not diagnostic; rather it is a method
for structuring thinking or means of classifying objectives.**)
The “Ansoff Matrix” is a 2x2
depiction of the options open to organizations if they wish to improve revenue
or profitability. The matrix was first described by ‘Igor Ansoff’ in 1957.
The Ansoff matrix is a simple
planning tool that can help with strategy development. This matrix recognizes
that in order to grow, a business has to consider both its markets and
products. The combination of existing and new products and markets provides
different marketing opportunities. It provides a simple framework which sum up
all the strategic directions an organization can adopt in one analytical tool.
It is based on the need for business organizations to do opportunity searching
and identifies four possible strategic directions.
The matrix is all about the relation
between product and the market of business (new & existig). The product
will be either an existing offering or a product which is new to the
organization. Customers, similarly, will be either part of an existing market
or members of a market not yet addressed by the organization and therefore, new
to them.
An organization is thus faced with
four options for commercial actions: - Concentrating on existing products for
existing markets, - looking for new products for existing markets, -seeking new
markets for existing products, - diversifying into new products for new
markets.
These four methods are –
1. Existing
products in existing markets: market penetration,
2. New products in existing
markets: new product development,
3. Existing products in new markets: market
development,
4. New products in new markets: market diversification.
Reference:
Meldrum, M. and McDonald, M. (2007), Marketing in a Nutshell: Key Concepts for
Non-specialists, UK: Butterworth-Heinemann
Moynihan, D. and Titley, B. (2001), Advanced Business,2nd ed, Oxford:
Oxford University Press
Wright, R. (1999),Marketing: Origins, Concepts, Environment,
UK:Business Press, Thomson Learning
