Ansoff Matrix.

Ximena Rios

Saint George Prep School

11th B

Ms. Andrea

Marzo, 3, 2023
 What is the Ansoff Matrix explanation ?

Of Russian origin, H. Igor Ansoff was a professor of engineering and mathematics who lived

from the beginning to the middle of the 20th century. Was published in the Harvard Business

Review in 1957. The Ansoff Matrix is often used in conjunction with other business and industry

analysis tools, such as the PESTEL, SWOT, and Porter’s 5 Forces frameworks, to support more

robust assessments of drivers of business growth. Ansoff had a different vision: he believed that

organizations should look at their context to improve their practices and grow.

The Ansoff Matrix, often called the Product/Market Expansion Grid, is a two-by-two framework

used by management teams and the analyst community to help plan and evaluate growth

initiatives. In particular, the tool helps concerned parties conceptualize the level of risk

associated with different growth strategies. The Ansoff matrix has a very simple design and

basically consists of two axes: markets and products, markets can be new or existing, and

products can also be new or existing. From this combination of variables, there are 4 scenarios

that result in 4 possible strategies.

What is an Ansoff Matrix example?
 What are the four strategies of the Ansoff Matrix?

Each box in the Matrix

corresponds to a

specific growth

strategy. They are:

1. Market

penetration – The

concept of increasing

sales of existing products in an existing market

2. Market Development – ​Focuses on selling existing products into new markets

 3. Product Development: Focuses on introducing new products into an existing market.

4. Diversification – The concept of entering a new market with entirely new products.

Market Penetration
This is the safest of the four options. Here, you focus on expanding sales of your existing

product in your existing market: you know the product works, and the market holds few surprises

for you. By employing a go-to-market strategy, management seeks to sell more of its existing

products in markets with which they are familiar and have existing relationships. Typical

execution strategies include:

● Increasing marketing efforts or streamlining distribution processes.

● Decreasing prices to attract new customers within the market segment.

● Acquiring a competitor in the same market.

Market Development
Here, you're putting an existing product into an entirely new market. You can do this by finding a

new use for the product, or by adding new features or benefits to it. It allows a management team

to take existing products and bring them to a different market. Approaches include:

● Serve a different customer segment or target demographic

● Entering a new domestic market (regional expansion)

● Entry into a foreign market (international expansion)

Product Development
This area is slightly more risky, because you're introducing a new product into your existing
market. A business that firmly has the ears of a particular market or target audience may look to
expand its share of wallet from that customer base. Think of it as a play on brand loyalty, which
may be achieved in a variety of ways, including:

● Investing in R&D to develop an altogether new product(s).

● Acquiring the rights to produce and sell another firm’s product(s).
● Creating a new offering by branding a white-label product that’s actually produced by a
third party.

Diversification
This is the riskiest of the four options, because you're introducing a new, unproven product into

an entirely new market that you may not fully understand. In relative terms, a diversification

strategy is generally the highest risk endeavor; after all, both product development and market

development are required. While it is the highest risk strategy, it can reap huge rewards – either

by achieving altogether new revenue opportunities or by reducing a firm’s reliance on a single

product/market fit.

1. Related Diversification – Where there are potential synergies that can be realized between the

existing business and the new product/market.

2. Unrelated Diversification – Where it’s unlikely that any real synergies will be realized

between the existing business and the new product/market.

Beyond the opportunity to expand your business, the main advantage of diversification is that,

should one business suffer from adverse circumstances, another may not be affected.
 APA References.

Web sites from which the information was obtained:

Home. MindTools. (n.d.). Retrieved March 11, 2023, from

https://www.mindtools.com/a2gy5ya/the-ansoff-matrix

Ansoff matrix. Corporate Finance Institute. (2023, March 4). Retrieved March 11, 2023,

from https://corporatefinanceinstitute.com/resources/management/ansoff-matrix/

Dourado, B., & Dantas, K. (2021, February 12). ¿Qué es la matriz ansoff y para qué sirve?

- rock content. Rock Content - ES. Retrieved March 11, 2023, from

https://rockcontent.com/es/blog/matriz-ansoff/

Images used:

Https://cdn.corporatefinanceinstitute.com/assets/ansoff-matrix-1.png. (n.d.). photograph.

Https://blog.hubspot.es/hubfs/media/matrizAnsoffCocaCola.png. (n.d.).

Https://blog.hubspot.es/hubfs/media/MatrizAnsoffAmazon.png. (n.d.).

Https://blog.hubspot.es/hubfs/media/MatrizAnsoffNestle.png. (n.d.).

Https://blog.hubspot.es/hubfs/media/MatrizAnsoffApple.png. (n.d.).

Https://blog.hubspot.es/hubfs/media/MatrizAnsoffAdidas.png. (n.d.).