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Ansoff matrix

This is another useful tool for a business when it is analysing its growth potential and setting marketing objectives.

The Ansoff product-market matrix, developed by Igor Ansoff, 'the father of corporate strategy' in 1957, helps firms to understand and assess marketing or business development strategy. Any business, or part of a business, can choose which strategy to employ, or which mix of strategic options to use. The matrix is used primarily to understand the risk component of various growth strategies. Ansoff argues that within a company there should be an element of 'core capability', linking past and future activities. In other words companies should concentrate on those things that they know and do well already, and build upon this.

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Some quick questions

  1. Identify examples of each Ansoff's growth strategies.
  2. Explain the reasons why a business decides to diversify.

Have a think about the answers to these and then follow the links below to compare your answers to ours.

Question 1 - answer

Question 2 - answer