Marketing : Ansoffs Matrix

A common tool used within marketing was developed by Igor Ansoff in 1957. His model gives organization five strategic business options.

1. Market Penetration: This involves increasing sales of an existing product and penetrating the market further by either promoting the product heavily or reducing prices to increase sales.

2. Product Development: The organization develops new products to aim within their existing market, in the hope that they will gain more custom and market share. For Example Sony launching the Play station 2 to replace their existing model...

3. Market Development: The organization here adopts a strategy of selling existing products to new markets. This can be done either by a better understanding of segmentation, i.e. who else can possibly purchase the product or selling the product to new markets overseas.

4. Diversification: Moving away from what you are selling (your core activities) to providing something new e.g. Moving over from selling foods to selling cars.

5. Consolidation: Where the organization adopts a strategy of withdrawing from particular markets, scaling back on operations and concentrating on its existing products in existing markets.