Saturday 15 April 2017

Ansoff Matrix

                                       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.
Image result for ansoff matrix benefits and limitations

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


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