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The Ansoff matrix - Coggle Diagram
The Ansoff matrix
Market penetration
When a business grows by increasing its market share
Sell more of their existing products on the same market
Safest option for growth
Relies on promoting brand loyalty (encourage repeat costumers)
Key factor to increase the chance of success
The growth potential of the market
The strength of costumer loyalty
The power and ability of competitors
Product development
Development of new products (can be variation or upgrade) for existing markets
Depends on loyal costumers
Key factors to reduce the risk of product development
Effective market research
Having a strong research and development system
Having first mover advantage
Diversification
Introducing a new product to a new market
Combines two elements of risk
Lack of familiarity and experience on the new market
The untested new market
Key factor to reduce the risk of diversification
Effective market research
Test to determine the attractiveness of the market and the cost of entering the market
Recognition of existing businesses
Possible tie ups with other businesses with experience
Market development
Looking for new markets or market segments
Key factores to reduce the risk of market development
Effective market research
Having local knowledge on the ground
Having an effective distribution channel