Marketing strategy and Ansoff
Introduced| English | Meaning |
|---|---|
| Ansoff matrix/ˈænsɒf ˈmeɪtrɪks/ | A growth-planning framework comparing existing or new products with existing or new markets. |
| diversification/daɪˌvɜːsɪfɪˈkeɪʃn/ | Expanding into different products, markets or activities to spread risk or seek growth. |
| market penetration/ˈmɑːkɪt ˌpenɪˈtreɪʃn/ | Increasing sales of existing products in markets a business already serves. |
| product development/ˈprɒdʌkt dɪˈveləpmənt/ | Creating new or improved products, including offering new products to an existing market in a growth strategy. |
| market development/ˈmɑːkɪt dɪˈveləpmənt/ | Seeking new markets or customer groups for an existing product. |
| risk appetite/rɪsk ˈæpɪtaɪt/ | risk appetite |
Four ways to grow
- A business that wants to grow faces a choice: sell more of what it has, or branch into something new?
- The Ansoff matrix 安索夫矩阵 lays out the four options — and their rising risk.
Ansoff strategy lab
Sort growth choices by product and market risk.
The Ansoff matrix crosses products with ______.
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Products (existing/new) against markets (existing/new).
The Ansoff matrix
- It crosses products (existing / new) with markets (existing / new), giving four strategies.
Risk rises as you move away from existing products and markets towards diversification 多元化.
Selling more of an existing product to its existing market is:
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Penetration deepens sales in the current market — lowest risk.
Launching a new product into a new market is:
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New product + new market = diversification, the highest-risk option.
Taking an existing product into a new market is:
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Existing product + new market = market development.
The four strategies
- Market penetration 市场渗透: sell more existing products to existing markets. Lowest risk.
- Product development 产品开发: new products for existing markets.
- Market development 市场开发: existing products into new markets.
- Diversification: new products and new markets. Highest risk.
A supermarket: retailers compete on price, range and customer experience
Market penetration is generally the highest-risk Ansoff strategy.
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False. Market penetration (existing products in existing markets) is the lowest-risk option. Diversification, with new products in new markets, carries the highest risk.
Choosing a strategy
- Lower-risk strategies (penetration) suit cautious firms or tough times.
- Diversification can spread risk across markets, but stretches the firm into the unknown.
Higher reward, higher risk. Diversification offers the biggest growth but the greatest chance of failure — the firm leaves behind everything it already knows. Match the strategy to the firm's risk appetite 风险偏好.
Ansoff's matrix: four growth strategies, with risk rising to the bottom-right
You've got it
- the Ansoff matrix crosses products (existing/new) with markets (existing/new)
- four strategies: penetration, product development, market development, diversification
- risk rises towards diversification — match strategy to risk appetite
Write from jam sold in 3 new countries
- A firm keeps the same jam and starts selling it in 3 new countries.
- Name the Ansoff strategy.
A firm sells its existing jam in 3 new countries and does not change the product. Which Ansoff strategy is that?
An existing product in a new market is market development.
What Ansoff strategy is the existing jam in 3 new countries?
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The product is unchanged and the market is new.