Ansoff's Matrix Flashcards
(14 cards)
1
Q
Definition
A
An analytical tool that helps managers choose and devise product and market growth strategies
* choice depends on the company’s objectives for its products and markets
2
Q
A
3
Q
Market penetration
A
Involves choosing to focus on selling existing products to existing markets
4
Q
Features of market penetration (3)
A
- minimal risk
- seeks to maintain or increase market share
- intense competition
5
Q
Product development
A
Selling new products in existing markets
6
Q
Features of product development (3)
A
- moderate risk
- innovation to replace existing products
- product improvements
7
Q
Market development
A
Selling existing products in new markets
8
Q
Features of market development (3)
A
- moderate risk
- entry into overseas markets
- new distribution channels
9
Q
Diversification
A
Selling new products in new markets
10
Q
A
11
Q
Features of diversification (3)
A
- high risk
- enables spreading of risk with a balanced product portfolio
- use of subsidiaries and strategic units
12
Q
Types of diversification
A
- related diversification: when a business caters for customers within the same industry
- unrelated diversification: growth by selling completely new products in untapped markets
13
Q
Benefits of matrix (2)
A
- simple, straightforward way to compartmentalise growth strategies
- enables discussions about potential risks and rewards of each growth strategy
14
Q
Drawback of matrix (2)
A
- does not quantify the level of risk of each strategy
- does not suggest a particular strategy - other tools needed for this
