Ansoff Matrix is a strategic planning tool that provides a framework to help executives, senior managers, and marketers to devise strategies and tactics for business growth.

It is also called product/market expansion grid, was developed by a mathemacian called H. Igor Ansoff.

He brought up an Idea that there are two approaches to developing Business growth

A. By Focusing on What is sold (Product growth)

B. By Focusing on who it is sold to (Market growth)

Most people make the mistake of just introducing a product without a proper strategy in place and end up making losses

The “Ansoff Matrix” consists of Four squares

When a company wants to increase sales by introducing an existing product into an existing market (Bigi beverage starting it’s own cola beverage in a market where there is coca-cola beverage)

Product Development:
When a company wants to introduce a new product in an existing market.. (Bigi starts producing chapman as part of it’s beverages )

Market Development:
When a company introduces an existing product into a new market. (Bigi introduces it’s beverages to another country not familiar with the brand)

When a company introduces a new product into a new market (Bigi starts making bottles, or clothes)

The risk is highest when a company engages diversification because you’re introducing a new product into a new market, chances are that the market might not like your product since it’s a new invention.

While the risk is low at Market penetration because the market is already familiar with the product being introduced to them.

But there are different approaches to engage when the company is faced with either the product development or market Development.


It is advised that a company should decrease the price of it’s products when introducing an existing product into an existing market, but this should be done with moderation because price is a benchmark for most potential customers to attach value.

Sales Promotion should be high in this phase, advertising, much publicity, bonanzas etc


At this phase, alot of research and development should be carried out to know how to bring out a superior product, the new product has to be branded uniquely from it’s package to it’s unique features and benefits. A partnership can come in handy or the company can acquire a patent right to be the supplier of the product to the new Market.
There should also be a good story around that product, people should be taught how to use that new product

MARKET DEVELOPMENT: Here the company should expand regionally or internationally.

The product should be introduced into an entire new market. They can also go as far as acquiring the sole right to be the only marketers of that product in that new market from the government. That way they increase the cost of other competitors switching to bring in their products into that market.

There should be some sort of sustainable strategy to keep bringing innovative ideas to that market to earn their trust and make your brand earn their loyalty.


HERE all or some of the stragies employed in the others can be adopted. Since the risk is so high and it’s best if it’s already a brand that is already established, the product should be targeted at their loyal customers of other products.

Hope you found value?