Ansoff’s Matrix

• Who developed the strategic direction model in 1957?

  Igor Ansoff
• What does the strategic direction model show?

  Options for a growing business to compete
• What are the two main ways to compete according to the model?

  Products and markets
• What are the two axes of the strategic direction model?

  Markets and products
• How are markets and products categorized in the model?

  New and existing
• What are the four quadrants of the Ansoff Matrix?

  1. Market Penetration
  2. Market Development
  3. Product Development
  4. Diversification
• What is market penetration in the Ansoff Matrix?

  Competing with existing products in existing markets
• What is market development in the Ansoff Matrix?

  Competing with existing products in new markets
• What is product development in the Ansoff Matrix?

  Competing with new products in existing markets
• What is diversification in the Ansoff Matrix?

  Entering new markets with new products
• Why is diversification considered the most risky strategy?

  It involves new markets and new products
• What is the least risky strategy in the Ansoff Matrix?

  Market penetration
• What is a potential issue with market penetration?

  Market saturation can limit growth
• What does product development involve?

  Releasing new products to existing markets
• Why is product development considered medium risk?

  It requires research and development costs
• What factors can help in successful product development?

  Brand loyalty and strong cash flow
• What is the risk associated with market development?

  Requires market research for new markets
• What cultural issues should be considered in market development?

  Differences when moving internationally
• What is a reason for a business to pursue diversification?

  To increase profits in a saturated market
• What can diversification lead to despite its risks?

  Enormous rewards and growth opportunities
• What is the significance of AWS for Amazon?

  It is a major growth area for Amazon
• What are the risks associated with each quadrant of the Ansoff Matrix?

  • Market Penetration: Least risk, focuses on existing products and markets.
  • Market Development: Medium risk, existing products in new markets.
  • Product Development: Medium risk, new products in existing markets.
  • Diversification: Most risk, new products in new markets.