17. ANSOFF’S MATRIX

OBJECTIVE

Define the most appropriate business strategy based on the existence of markets and products.

DESCRIPTION

Ansoff’s matrix is usually performed after a SWOT analysis, in which strengths, weaknesses, opportunities, and threats can be transformed into business strategies:

• -          Market penetration: the organization decides to use existing products in the existing market by improving tactics and strategies to push sales, for example through advertising, promotion, and pricing;
• -          Product development: the organization decides to develop new products for an existing market or to add new features;
• -          Market development: the organization decides to sell existing products to new markets, for example exporting to new countries;
• -          Diversification: the organization decides to take a more radical approach by creating a new product for a new market. This can be the result of an opportunity caused by a new trend, identified in the SWOT analysis.

Figure 14: Ansoff’s Matix

Once the strategy has been defined using Ansoff’s matrix, the objectives, strategies, and tactics can be revised in the VMOST model. The information needed for this matrix can usually be found in previous internal analysis, external analysis, and SWOT analysis.

TEMPLATE

Download the Ansoff's Matrix Excel Template