• The Product-Market Growth Matrix • The Product/Market Expansion Grid Strategic Analysis Tool

1. Yolanda B. Williams
April 6, 2011
1 | P a g e
Strategy Tool
1. Name of Strategy Tool - The Ansoff Matrix is also known as:
The Product-Market Growth Matrix
The Product/Market Expansion Grid
2. Introduction/History
The Ansoff Matrix was invented by H. Igor Ansoff. It was first published in the Harvard Business Review (1957) in
an article called 'Strategies for Diversification'.
3. Definition/Description
The Ansoff Matrix is a simple two x two matrix thathelp organizations map product and market growth strategy.
4. Ansoff Matrix provides four different growth strategies:
a. Market Penetration - the firm seeks to achieve growth with existing products in their current market
segments, aiming to increase its market share.
b. Market Development - the firm seeks growth by targeting its existing products to new market segments.
c. Product Development - the firms develops new products targeted to its existing market segments.
d. Diversification - the firm grows by diversifying into new businesses by developing new products for new
markets.
5. Purpose/Primary Application - Portrayal of alternative corporate growth strategies
6. Relevance/Benefits
Identifies high level strategies.
Evaluate highly complex scenarios and allow for a rapid and easy assessment
Focuses on the firm's present and potential products and markets
Acknowledges the risk associated with various options
7. Limitations - Real World/ External environmentapplication
Does not account for the complexities of real-world markets or product decisions
Does not consider external environment
8. Related Topics/ Cross-Reference
Product Life Cycle Analysis
BCG Matrix
SWOT analysis
9. Methodology/Process Example – Coca Cola
10. Strategic Significance
a. Primary Strategic Task of this tool in practice : Strategic Growth
b. Primary Functional Focus of this tool in practice: Marketing/Product Development

2. Yolanda B. Williams
April 6, 2011
2 | P a g e
11. Actual Organizations Successfully using this Strategy Tool
Kellogg's
Coca-Cola
Avon
12. Application to the Business System at Your Firm
Market penetration
Wal-Mart understands the value proposition of its customers of correct labeling, quick check out and car
parking facilities and more importantly attracts more and more customers by providing lowest prices through
leveraging economies of scale by improving operational efficiencies.
Market development
Walmart hasidentified new geographical markets in China, India, and now South Africa for new applications of
the existing products, and so that new segment of customers can be targeted.
Product development.
Walmart has created consumer financial products , providing limited banking services such as check cashing,
credit cards and bill payments .
Diversification
Walmart utilizes private brand labels such as Great Value for food and George for clothing.
13. References/Sources
"The Ansoff Matrix." www.ngfl-cymru.org.uk. N G F L Wales Business Studies A Level Resources, 9 Sept. 2009. Web.
5 Apr. 2011. <http://www.ngfl-cymru.org.uk/ansoff_matrix-2.pdf>.
"The Times 100 - Edition 14 - Kellogg's Brief Case Study." Business Studies Case Studies | GCSE AS A Level Business
Studies Resources | Teacher & Student Revision Theory.The Time Newspaper.Web. 07 Apr. 2011.
<http://www.thetimes100.co.uk/studies/view-brief-study--extending-the-product-life-cycle--6-301.php>.
"Tool for Analyzing and Understanding Strategic Options - Ansoff's Grid."Thought Leadership - Business
Management Concepts.Alagase, Inc. Web. 07 Apr. 2011. <http://www.alagse.com/strategy/s15.php>.
"30 Minute Business Analysis ANSOFF Matrix." VentureNavigator - Online Business Support.The Business Edge
Consortium.Web. 07 Apr. 2011. <http://www.venturenavigator.co.uk/content/545>.
"Coca-Cola Great Britain Case Study | Product Development - Using Market Research to Develop a Product Range |
The Times 100."Business Studies Case Studies | GCSE AS A Level Business Studies Resources | Teacher &
Student Revision Theory.The Times Newspaper.Web. 07 Apr. 2011. <http://www.thetimes100.co.uk/case-
study--using-market-research-to-develop-a-product-range--3-108-7.php>.
STRATEGY ADAGE
“For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to
finish it.”
In my life, it has always been important to analyze the risks, costs and effort involved a plan or decision in order to
determine if it is best to go forward in its execution.