Ansoff Matrix.Ppt
Ansoff Matrix
= The product/market grid
What is the Ansoff Matrix?
The Ansoff Matrix, designed by Igor Ansoff, classifies and explains different growth strategies for a company. This matrix is used by companies which have a growth target or a strategy of specialization. This tool, crossing products and markets of a company, facilitates decision making. The Ansoff matrix offers four strategies to achieve the objectives. Penetration of the market ; Extension of the market ; New products ; Diversification.
Golden rules
Opportunity = the matrix provides not only the opportunity to expand on an existing market but one can also explore the possibility to withdraw from the market or find new markets. Risk = each strategy will have a different risk level. This risk increases proportionally with the level of change. Diversifying is more risky than increasing the penetration of a product on an existing market.
Products new Markets existing Penetration of the market Extension of the market existing New products
new
Diversification
© Copyright 2008 LUXINNOVATION G.I.E., The National Agency for Innovation and Research in Luxembourg
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Ansoff Matrix
= The product/market grid
Structure of the Ansoff Matrix
Penetration of the market The company is trying to expand its sales in the existing market. Existing products are sold to existing customers. The product is not modified but the firm is seeking to increase its revenues by means of promoting or repositioning its products. One has to convince potential clients and divert competitors. Extension of the market The company is trying to increase its sales by introducing its products into new markets. A range of existing products is introduced into new markets. Again the product is not modified, it will just be sold to a new target (e.g. through export). By taking into account cultural differences, the products may undergo minor changes. New products The company is increasing its
= The product/market grid
What is the Ansoff Matrix?
The Ansoff Matrix, designed by Igor Ansoff, classifies and explains different growth strategies for a company. This matrix is used by companies which have a growth target or a strategy of specialization. This tool, crossing products and markets of a company, facilitates decision making. The Ansoff matrix offers four strategies to achieve the objectives. Penetration of the market ; Extension of the market ; New products ; Diversification.
Golden rules
Opportunity = the matrix provides not only the opportunity to expand on an existing market but one can also explore the possibility to withdraw from the market or find new markets. Risk = each strategy will have a different risk level. This risk increases proportionally with the level of change. Diversifying is more risky than increasing the penetration of a product on an existing market.
Products new Markets existing Penetration of the market Extension of the market existing New products
new
Diversification
© Copyright 2008 LUXINNOVATION G.I.E., The National Agency for Innovation and Research in Luxembourg
1/2
Ansoff Matrix
= The product/market grid
Structure of the Ansoff Matrix
Penetration of the market The company is trying to expand its sales in the existing market. Existing products are sold to existing customers. The product is not modified but the firm is seeking to increase its revenues by means of promoting or repositioning its products. One has to convince potential clients and divert competitors. Extension of the market The company is trying to increase its sales by introducing its products into new markets. A range of existing products is introduced into new markets. Again the product is not modified, it will just be sold to a new target (e.g. through export). By taking into account cultural differences, the products may undergo minor changes. New products The company is increasing its