Marketing strategy and Ansoff
| English | Chinese | Pinyin |
|---|---|---|
| Ansoff matrix | 安索夫矩阵 | ān suǒ fū jǔ zhèn |
| diversification | 多元化 | duō yuán huà |
| market penetration | 市场渗透 | shì chǎng shèn tòu |
| product development | 产品开发 | chǎn pǐn kāi fā |
| market development | 市场开发 | shì chǎng kāi fā |
| risk appetite | 风险偏好 | fēng xiǎn piān hǎo |
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 ______.
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:
Penetration deepens sales in the current market — lowest risk.
Launching a new product into a new market is:
New product + new market = diversification, the highest-risk option.
Taking an existing product into a new market is:
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
Diversification is generally the highest-risk Ansoff strategy.
It moves the firm into both new products and new markets.
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