The Ansoff Product-Market Growth Matrix is a marketing tool created by Igor Ansoff and

first published in his article "Strategies for Diversification" in the Harvard Business Revie
!"#$%&' The matri( allos marketers to consider ays to gro the business via e(isting and)or
ne products* in e(isting and)or ne markets + there are four possible product)market
combinations' This matri( helps companies decide hat course of action should be taken given
current performance' The matri( consists of four strategies,
-arket penetration !e(isting markets* e(isting products&, -arket penetration occurs
hen a company enters)penetrates a market ith current products' The best ay to
achieve this is by gaining competitors. customers !part of their market share&' /ther
ays include attracting non0users of your product or convincing current clients to use
more of your product)service* ith advertising or other promotions' -arket penetration
is the least risky ay for a company to gro'
1roduct development !e(isting markets* ne products&, A firm ith a market for its
current products might embark on a strategy of developing other products catering to
the same market !although these ne products need not be ne to the market2 the point
is that the product is ne to the company&' 3or e(ample* -cDonald.s is alays ithin
the fast0food industry* but fre4uently markets ne burgers' 3re4uently* hen a firm
creates ne products* it can gain ne customers for these products' Hence* ne product
development can be a crucial business development strategy for firms to stay
competitive'
-arket development !ne markets* e(isting products&, An established product in the
marketplace can be teaked or targeted to a different customer segment* as a strategy to
earn more revenue for the firm' 3or e(ample* 5uco6ade as first marketed for sick
children and then rebranded to target athletes' This is a good e(ample of developing a
ne market for an e(isting product' Again* the market need not be ne in itself* the
point is that the market is ne to the company'
Diversification !ne markets* ne products&, 7irgin 8ola* 7irgin -egastores* 7irgin
Airlines* 7irgin Telecommunications are e(amples of ne products created by the
7irgin 9roup of :;* to leverage the Virgin brand' This resulted in the company
entering ne markets here it had no presence before'
The matri( illustrates* in particular* that the element of risk increases the further the strategy
moves aay from knon 4uantities 0 the e(isting product and the e(isting market' Thus*
product development !re4uiring* in effect* a ne product& and market e(tension !a ne market&
typically involve a greater risk than <penetration. !e(isting product and e(isting market&2 and
diversification !ne product and ne market& generally carries the greatest risk of all' In his
original ork* hich did not use the matri( form* Igor Ansoff stressed that the diversification
strategy stood apart from the other three'
=hile ansoff are usually folloed ith the same technical* financial* and merchandising
resources hich are used for the original product line* diversification usually re4uires ne
skills* ne techni4ues* and ne facilities' As a result it almost invariably leads to physical and
organi6ational changes in the structure of the business hich represent a distinct break ith
past business e(perience'
3or this reason* most marketing activity revolves around penetration'
Source, =ikipedia e(tract based on Ansoff* I'* Strategies for Diversification* Harvard Business
Review* 7ol' >$ Issue $* Sep0/ct "#$%* pp'"">0"?@