Ansoff matrix
Company owners always think about increasing the growth of their business in the long term, even if their business plan is going well, but they are always looking for increasing profits and obtaining new customers. Company owners have a wide range of options to achieve these goals, whether by offering... New products or opening doors in new markets, but nevertheless business owners face the fear that these steps will fail in light of not knowing which step is correct and which will be the best in developing the company, and this is what the Ansoff matrix does, which helps you choose the correct step while avoiding all Taking risks for all available options and designing the best plan based on the company's data and its position in the market.
What is a matrix Ansoff?
It is also called the market and product matrix, and it is a network model that is used by business owners and marketers to determine the extent of opportunities to increase revenues, which future plans are more successful, and to identify all the risks that the company may face.
The matrix is based on four Strategies A basic method through which the risks and chances of success of development methods to increase sales are known
The four strategies of the matrix Ansoff
Ansoff matrix analysis is based on four basic strategies and axes through which you can understand the risks that may face the business development process.
- Market penetration strategy
It is the safest strategy, as it works to expand the scope of selling the product in the market with the belief that the market may bring some surprising measures. Through this strategy, the company seeks to increase its market share, which can be implemented by following a policy of decreasing prices with the aim of attracting new customers. It can also Increase marketing campaigns and promotion on a broader scale.
- Product development strategy
It is a low-risk strategy as it depends on introducing a new product in the current market, as this strategy includes expanding the company’s product range, and it is used when companies have a strong analysis and understanding of the market and know all the solutions that can meet the current market need, and it can be implemented by developing products. new, or combine resources to create a new competing product.
- Market development strategy
This strategy depends on entering a new market with a product that the company already has, which means expanding the company into new markets and new regions. This strategy will be more successful if the company uses a new and special technology and benefits from it to open a new market, or open a new market that includes customers who have the same The behavior and desires of the company's current customers.
- Diversification strategy
It is the most risky among the four strategies of the Ansoff matrix, as it depends on launching a new product in a new market, and despite the risks of implementing it, these risks can be mitigated by following the relevant diversification plan, and through this strategy you can, despite the high risks, it will benefit you with increased Significant revenue.
Read also – Broad targeting strategy
How to use a matrix Ansoff?
Below we explain ways to use the Ansoff matrix to evaluate the various risks that business owners face when making growth and marketing decisions.
First: Options analysis
Analyze the options available to you and subject them to the four matrix strategies as we mentioned previously, and choose the appropriate methods for each option, in addition to knowing the risks and potential market threats.
Second: Risk management
After conducting a risk analysis and knowing its magnitude, prioritize the risks expected to occur by using a risk impact chart and then develop a plan to address them.
Third: Implementing the best option
Using decision matrix analysis, you will be able to weigh the various factors of all the options available to you, and thus you will be able to choose and implement the best and appropriate option for the company.
There are some marketers who use the Ansoff matrix grid consisting of nine squares when performing a more complex analysis, where they place products that combine existing products and new products, as well as expanded markets from existing markets and new markets. This analysis is useful in clarifying the difference between the relaunched product and the developed product. As well as the difference between expanding a market or opening a new market.
Hence, the Ansoff matrix is a network analysis model that is used to find out the best available options and to know the risks that may face the growth process, relying on four basic strategies, which are worked on by placing the options in the appropriate strategy box so that you can then know the risk associated with each. A choice, a strategy, and the best plan to address it, which helps you make informed and effective decisions to grow your company.
