Ansoff Matrix

Ansoff Matrix

The Ansoff Growth Matrix is a marketing planning tool to determine the product and market growth strategy of a business.

The matrix consists four growth strategies:-

1. Market Penetration:

It is a growth strategy where a business focuses on selling existing products into existing markets.

2. Market Development:

It is a growth strategy where a business seeks to sell it's existing products into new markets.

3. Product Development:

It is a growth strategy where a business introduces new products into existing market.

4. Diversification:

It is a growth strategy where a business sells new products in new markets.

The first three strategies follows the same technical, financial and merchandising resources used for the original product line but the diversification normally requires a company to acquire new skills, new techniques and new facilities. Hence the diversification strategy  is more risky because the business moves into a new markets and product but the company has lack of knowledge about new market and product.