Ansoff's Matrix

• Ansoff’s Matrix is a tool for guiding corporate strategy and decision making
• It helps businesses determine growth strategies
• The matrix has four strategic growth options: market penetration, market development, product development, and diversification
• Market penetration focuses on growing in existing markets with the same products
• Market development involves expanding into new markets with the same products
• Product development is about selling new products in the same markets
• Diversification is the highest risk strategy, involving entering completely new markets with new products

Ansoff’s Matrix is a tool that businesses can use to guide their strategic decisions and growth strategies. It consists of four strategic growth options: market penetration, market development, product development, and diversification. Market penetration focuses on growing in existing markets with the same products, while market development involves expanding into new markets with the same products. Product development entails selling new products in the same markets, and diversification involves entering completely new markets with new products. The level of risk increases as you move down and to the right on the matrix, with diversification being the highest risk strategy but also offering the potential for high rewards. However, Ansoff’s Matrix has limitations as it only considers markets and products, neglecting other important factors such as the strengths and weaknesses of the business and the external environment. Strategic decision-making should take these factors into account to ensure success.