What Is The Ansoff Matrix Method
The Ansoff Matrix Method differs from the other strategic planing tools on this page, since its purpose is not general strategic planning. The Ansoff Matrix method is intended to link together a company's marketing strategy to its overall strategic direction.
Here's a more formal definition:
The Ansoff Matrix, or Ansoff Box, is a business analysis technique that provides a framework enabling growth opportunities to be identified. It can help you consider the implications of growing the business through existing or new products and in existing or new markets. Each of these growth options draws on both internal and external influences,
investigations, and analysis that are then worked into alternative strategies.
(from The Ansoff Method)
Ansoff Method Components
A quick look at the picture below illustrates that this method, developed in the 50's is a little more complex than the simpler SWOT or PEST methods of strategic planning.
The matrix consists of four options for developing a marketing strategy:
- Market Development
- Market Penetration
- Product Development
- Diversification
In essence these are the strategies for growing one's business.
In addition one can choose to apply an analysis to existing products or new products and to existing markets and new markets for the company.
Within each of the main strategy options there exists additonal sub-options. For example within "market development" there are additional paths:
- New geographical markets
- New product dimensions or packaging
- New distribution channels
- New market segment created by different pricing
Conclusion
A full discussion of the model is beyond our scope, because of the many many combinations and permutations that can occur as a result of this matrix structure.
If you'd like additional information on the Ansoff Matrix, you can try the free book available here.