Ansoff matrix: Best Business Growth Strategy
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All That You Need to Know about Ansoff Matrix
If you are in the marketing business, then you must have heard of the term ‘Ansoff Matrix. This is a standard theory taught by all the business schools around the globe.
Ansoff Matrix can be traced back to the paper where it was mentioned for the first time by Igor Ansoff in 1957.
This paper introduced a new idea of marketing strategy, which suggested that marketing strategy is an amalgamation of four growth areas.
These growth areas were market penetration, market development, product development, and diversification.
If you too want to understand Ansoff Matrix in a better way with a good Ansoff Matrix example then continue reading as we explain all that you need to know about this.
How to Use Ansoff Matrix?
Ansoff Matrix is a great communication tool that can help you understand the growth of your company. All you have to do is to select one of the four strategies introduced by Ansoff.
Market penetration is the first quadrant of the Ansoff Matrix theory and it applies to businesses that already have a product or service and also a known market.
This company needs planning and strategy to penetrate the market in order to propagate their business via their products or services.
In order to grow the company, they have to go out of their way to increase their market share.
Ansoff Matrix product development strategy is for companies that already have a product in the market and a loyal customer base too.
The only thing the company needs to do is to launch new products in order to attract more customers and stay relevant.
The best way to do this is to communicate to the customer, understand their needs, and then use their R&D department to produce favorable products.
Ansoff Matrix market development strategy is used by companies that already have a finished product but want to enter a new market.
A prime example for such companies is KFC and McDonalds as these companies already have a big empire, but they are still trying to penetrate the Asian subcontinent in order to expand their business.
Diversification is one of the boldest moves that a company could make. This is the strategy used by companies that have a new product to be launched in a relatively new market.
A good example of this is Samsung, which started as a trading company, later expanded to insurance, and then entered the electronics business.
Now, they are solely known for their dominance in the electronic devices business and created a humongous empire.
Last on Ansoff Matrix
All in all, Ansoff Matrix is a great tool for any organization to flourish in its market. This not only applies to the newer firms but also the old ones. You can dig into this topic deeper and implement it in your business as well.