Ansoffs Matrix Flashcards
What is Ansoffs Matrix?
A marketing planning model that is used to assess the risk of different growth strategies
What are the four quadrants of Ansoff’s matrix?
Market penetration, product development, market development, diversification
What is market penetration?
The extent to which is a product is recognised and bought by customers in a particular market.
Selling existing product into existing market.
Lowest risk strategy
Trying to inc market share
What can be said to evaluate market penetration?
- business focuses on markets and products it knows well
- they business can exploit insights on what customers want (and competitors)
- unlikley to need significant market research
What is product development?
Selling a new product into an existing market.
A growth strategy.
What can be said to evaluate product development?
- often plays to strengths of an established business
- strong emphasis on effective market research and successful innovation
- great way of exploiting existing customer base
- being first to market usually important
What is market development?
Growth strategy where business seeks to sell its existing products into a new market
What are the approaches to market development?
- a new geographical market
- different pricing policies to attract new customers
What can be said to evaluate market development?
- logical strategy - existing markets saturated or in decline
- often riskier than product dev
- exiting products may not suit new markets - depends on needs of the existing customers
what is diversification?
Growth strategy where a business markets new products in new markets
What are the approaches to diversification?
- innovation and r&d
- acquire existing business in market
What can be said to evaluate diversification?
- inherently risky strategy
- no direct experience of product or market
- few economies of scale (initially)
- if successful overall risk of business is spread
