The Ansoff Matrix was invented by H. Igor Ansoff. It was firstly published in his article
"Strategies for Diversification" in the Harvard Business Review (1957)
. Ansoff
presented the matrix that focused on the company’s present and potential future
products or areas of engagement. The matrix shows practitioners to consider ways
with four possible product/market combinations to grow the business via existing
and/or new products, in existing and/or new markets. This matrix hepls companies to
define two key factors for their marketing strategies: what is sold and who it is sold to.
Therefore it relates only to products and markets and gives companies four
alternatives courses of action when considering their marketing objectives:
• Selling existing products to existing markets
• Extending existing products into new markets
• Developing new products for existing markets
• Developing new products for new markets
The matrix consists of four strategies which are set out in a four-box matrix that
depicts simply the logical combination of two available “positioning variables”;
existing and potential products against existing and potential markets as follows:
"Strategies for Diversification" in the Harvard Business Review (1957)
. Ansoff
presented the matrix that focused on the company’s present and potential future
products or areas of engagement. The matrix shows practitioners to consider ways
with four possible product/market combinations to grow the business via existing
and/or new products, in existing and/or new markets. This matrix hepls companies to
define two key factors for their marketing strategies: what is sold and who it is sold to.
Therefore it relates only to products and markets and gives companies four
alternatives courses of action when considering their marketing objectives:
• Selling existing products to existing markets
• Extending existing products into new markets
• Developing new products for existing markets
• Developing new products for new markets
The matrix consists of four strategies which are set out in a four-box matrix that
depicts simply the logical combination of two available “positioning variables”;
existing and potential products against existing and potential markets as follows:
- Market Penetration:
called market penetration
• Increasing the existing share in the existing market to facilitate further growth.
• Market penetration is considered a low risk method to grow the business
2. Market Development
• When companies develop existing products into new markets, it is known as
market development.
• Taking existing product into new markets, for example, expanding sales from
purely the domestic market into the european market.
• The product can also be targeted to anther customer segment. Either way,
both strategies can lead to additional earnings for the business
3. Product Development
• Companies develop new products in existing markets. This is called product
development.
• Offering new products or modifying existing products into the existing markets.
4. Diversification
• An organization that introduces new products into new markets has chosen a
strategy of diversification.
• Either with related products and markets or unreleated products that are totally
unconnected with the existing products and markets.
• Related diversification describes how companies stay in a market with which
they have some familiarity.
• Brand new products may also be created in an attempt to leverage the
company's brand name.
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