Amazon Ansoff Matrix

Amazon Ansoff Matrix is a marketing planning model that helps the e-

commerce and cloud computing company to determine its product and
market strategy. Ansoff Matrix illustrates four different strategy options
available for businesses. These are market penetration, product
development, market development and diversification.
1. Market penetration. Market penetration refers to selling
existing products to existing markets. Amazon uses market
penetration strategy aggressively. Sophisticated user
experience features in general and Recommendations feature
on e-retailer’s website in particular play an important role in
the application of market penetration strategy. Specifically, the
e-commerce giant focuses on user experience personalization
thanks to efficient application of data science and machine
learning with positive implications on the volume of sales of
existing products to existing markets.
2. Product development. This involves developing new
products to sell to existing markets. Product
development is one of the core strategies used by
Amazon. Started by Jeff Bezos selling only physical books
online in 1997, today Amazon sells anything that can be
sold online. The largest internet retailer in the world by
revenue sells more than 500 million products, including
products sold by third parties on Amazon platform. Top
product categories include clothing, shoes, jewellery,
home and kitchen appliances, books, electronic devices,
sports and outdoor items and others.
3. Market development. Market development strategy
is associated with finding new markets for existing
products. Amazon is engaged in market development in
a systematic manner. Started only in the US, Amazon
currently has country-specific sites in 13 countries,
including Canada, the United Kingdom, China and
India. Moreover, Prime Free Same Day and Prime Free
One Day services are available in more than 8000 cities
and towns. Prime Now service is available in more than
50 cities in 9 countries.
4. Diversification. Diversification involves
developing new products to sell to new
markets and this is considered to be the
riskiest strategy. Amazon uses
diversification to a certain extent. As a
result of diversification strategy Amazon
currently operates in media, hardware,
advertising and other business segments.