Business - ANSOFFS MATRIX

Question 1

What is ansoffs matrix?

Answer 1

Ansoffs matrix is a tool for comparing the level of risk involved with the different growth strategies. It helps managers to decide on a direction for strategic growth.

Question 2

What are ansoffs four corporate strategies in the matrix?

Answer 2

Ansoff suggetsted four corporate strategies that a business can use to set its direction for growth and development:

• Market penetration - existing product, existing market. (least risky)
• New product development - New product, existing market (moderate risk)
• Market development - existing product, new market (moderate risk)
• Diversification - new products, new market (highest risk)

Question 3

What are the factors that are assesed in ansoffs matrix?

Answer 3

• New markets, existing markets
• New products, existing products

Question 4

What is the advantage of ansoffs matrix?

Answer 4

The advantage of ansoffs matrix is that it doesn’t just lay out potential strategies for growth - it also foces managers to think about the expected risks of moving in a certain direction.

Question 5

What is a disadvantage of ansoffs matrix?

Answer 5

One disadvantage of the matrix is that it fails to show that market development and diversification strategies tend to require significant change in the day-to-day workings or tactics of the business.