Ansoff's Matrix

Ansoff's Matrix, also known as the Product/Market Expansion Grid, is a strategic planning tool used to help organisations identify and evaluate potential growth opportunities. The matrix is based on two key variables; products and markets.

The four quadrants of Ansoff's Matrix are:

1. Market penetration - This strategy involves selling more of the existing products to the existing markets where the organisation already has a foothold. The aim of this strategy is to increase the organisation's market share in its current market.

2. Market development - This strategy involves selling existing products into new markets. The aim of this strategy is to expand the organisation's customer base by entering new geographic or demographic markets.

3. Product development - This strategy involves developing new products for existing markets, leveraging existing market knowledge and position in the market. The aim of this strategy is to provide new and improved products to the organisation's existing customer base.

4. Diversification - This strategy involves developing new products for new markets. The aim of this strategy is to diversify the organisation's product portfolio and enter new markets.

Ansoff's Matrix can be used to help an organisation to identify and decide potential growth opportunities might be the most successful. The four quadrants of the matrix can be used to examine the possible pathways to growth and can promote an informed and strategic approach to growth.

To use Ansoff's Matrix, follow these steps.

1. Identify the organisation's current product and market offerings.

2. Evaluate the potential risks and benefits of each of the four quadrants of the matrix.

3. Select the quadrant(s) that offer the greatest potential for growth while making sure that the pathways chosen are in line with the organisation's overall strategy.

4. Develop a plan to execute the selected strategy.

Overall, Ansoff's Matrix is a valuable tool for organisations seeking to grow and expand their business. By considering the various growth options available to them, organisations can develop a more informed and strategic approach to growth, and increase their chances of success.