Date: November 9 2023

According to Ansoff, a business is presented Market Penetration: Selling more of your

with four options for growth existing business to existing customers or
existing markets.

Product Development: Developing your

existing product and/or service.

Market Development: Entering new

markets.

Diversification: Entering new markets with

new products and/or services.

Two variables to consider: 1. The market in which the business

operates.
2. The product or products intended for
sale.

In terms of the market, there are two options 1. To remain in the existing market.
for growth: 2. To enter new products.

In terms of the product, there are two options 1. To sell existing products.
for growth: 2. To develop new products.

After consolidating info, you get this - >

What can you use an Ansoff matrix for? As covered previously, an Ansoff matrix
can be used effectively to assess the
 appropriateness of a particular strategy.

By placing the proposed strategy into the

Ansoff matrix, we can identify the level of
risk the company will have to take in order
to implement the strategy.

Then, by referring to the current situation

of the company (e.g. its objectives or its
financial position), we can determine
whether or not the strategy is prudent.

Again, all tools have their strengths and

limitations, and the Ansoff matrix is no
different.

Advantages of Ansoff Matrix: ● It can indicate the level of risk;

● It is easy to construct and analyse;
● It helps with collaborating and with
understanding different options;
● It is a useful visual tool;
● It provides possible strategies for
growth.

Limitations of Ansoff Matrix:

● It takes a generalized view of the

market, rather than considering
actual customer experiences;
● It can be challenging in the short
term to implement these strategies;
● It is very simple, so it is unlikely to
be used on its own;
● It does not allow for grey areas;
● It does not take into consideration
all factors, e.g. competitors.