Nestle Ansoff Matrix
Introduction of Ansoff Matrix
This well known marketing tool was first published in the Harvard Business Review (1957) in an article called 'Strategies for Diversification'. It is used by marketers who have objectives for growth. Ansoff's matrix offers strategic choices to achieve the objectives. There are four main categories for selection.
The market penetration strategy is the least risky since it leverages many of the firm’s existing resources and capabilities. In a growing market, simply maintaining market share will result in growth, and there may exist opportunities increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursues if the firm is to continue to grow.
Market development options include the pursuit of additional market segments or geographical regions. The development of new market for the product may be good strategy if the firm’s core competencies are related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more ricks then a market penetration strategy.
A product development strategy may be appropriate if the firm’s strengths are related to its specific customer rather than to the specific product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customer. Similar to the case of new market development, new product development carries more rick then simply attempting to increase market share.
Diversification is the most risky of the four growth strategies since it requires both products and market development and may be outside the core competencies of the firm. In fact, this quadrant of the matrix has been referred to by some as the “suicide cell”. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a
This well known marketing tool was first published in the Harvard Business Review (1957) in an article called 'Strategies for Diversification'. It is used by marketers who have objectives for growth. Ansoff's matrix offers strategic choices to achieve the objectives. There are four main categories for selection.
The market penetration strategy is the least risky since it leverages many of the firm’s existing resources and capabilities. In a growing market, simply maintaining market share will result in growth, and there may exist opportunities increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursues if the firm is to continue to grow.
Market development options include the pursuit of additional market segments or geographical regions. The development of new market for the product may be good strategy if the firm’s core competencies are related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more ricks then a market penetration strategy.
A product development strategy may be appropriate if the firm’s strengths are related to its specific customer rather than to the specific product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customer. Similar to the case of new market development, new product development carries more rick then simply attempting to increase market share.
Diversification is the most risky of the four growth strategies since it requires both products and market development and may be outside the core competencies of the firm. In fact, this quadrant of the matrix has been referred to by some as the “suicide cell”. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a