Ansoff Matrix (DP IB Business Management)

Revision Note

Flashcards

Development of Corporate Strategy

  • Ansoff’s Matrix is a tool for businesses who want to grow quickly and have a growth objective

  • It is used to identify an appropriate corporate strategy and identify the level of risk associated with the chosen strategy

  • The model considers four elements, which are broken down into two categories

    • The market - existing and new markets

    • The product - existing and new products

Diagram: Ansoff's matrix

Ansoff’s Strategic Matrix
Ansoff’s Strategic Matrix

Market penetration

  • The least risky strategy to achieve growth is to pursue a strategy of market penetration 

    • This involves selling more products to existing customers by encouraging

      • More regular use of the product

      • Increased usage of the product

      • Brand loyalty of customers

  • Market development involves finding and exploiting new market opportunities for existing products by

    • Entering new markets abroad

    • Repositioning the product by selling to different customer profiles (selling to other businesses as well as direct to consumers)

    • Seeking complementary locations

      • E.g. M&S Food has achieved significant growth since teaming up with fuel retailers such as BP and Applegreen and providing express retail outlets 

Product development

  • Product Development involves selling new or improved products to existing customers by

    • Developing new versions or upgrades of existing successful products

    • Redesigning packaging and aesthetic features

    • Relaunching heritage products at commercially convenient intervals

      • E.g. Lindt relaunches Christmas-themed products each year, often with a subtle design change, to recapture the interest of customers 

Diversification 

  • Diversification is the most risky growth strategy as it involves targeting new customers with entirely new or redeveloped products

    • Examples of diversification include

      • UK supermarket Tesco launching a range of financial products including current accounts and credit cards

      • Café chain Greggs launching a range of themed clothing products

Last updated:

You've read 0 of your 10 free revision notes

Unlock more, it's free!

Join the 100,000+ Students that ❤️ Save My Exams

the (exam) results speak for themselves:

Did this page help you?

Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.