Part- III : Strategy Formulation and Choice

Ch-17: Ansoff’s Product/Market Grid

Chapter
17 Ansoff’s Product /
Market Grid

Copyright © 2008, C Appa Rao, B Parathiswara Rao, K Sivaramakrishna

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Strategic Management and Business Policy Text and Cases Rao, K Sivaramakrishna
Excel Books
 Part- III : Strategy Formulation and Choice
Ch-17: Ansoff’s Product/Market Grid

Introduction
Ansoff’s (1987) product/market expansion grid is a framework for identifying
corporate growth opportunities. Five dimensions determine the scope of options
(growth vectors), for corporate strategy. They are:
1. Product/market scope
2. Growth vector
3. Competitive advantage
4. Synergy
5. Make or buy.
Finally, there is the question of ‘make or buy’. This refers to the corporate
strategic option of embarking on integrative and diversified growth beyond the
current scope of business by means of acquisition (s).
Copyright © 2008, C Appa Rao, B Parathiswara Rao, K Sivaramakrishna

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Strategic Management and Business Policy Text and Cases Rao, K Sivaramakrishna
Excel Books
 Part- III : Strategy Formulation and Choice
Ch-17: Ansoff’s Product/Market Grid

Ansoff’s Product/Market Grid

Four generic growth strategies follow from Ansoff’s matrix, which are
discussed in detail in Chapter 20. They are:

1. Market penetration

2. Market development

3. Product development

4. Diversification.

Cont….
Copyright © 2008, C Appa Rao, B Parathiswara Rao, K Sivaramakrishna

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Strategic Management and Business Policy Text and Cases Rao, K Sivaramakrishna
Excel Books
 Part- III : Strategy Formulation and Choice
Ch-17: Ansoff’s Product/Market Grid

Market Options Matrix

Withdrawal Product or service:

Demerger increasing technical
Privatisation innovation

Present New

Market Product
Present penetration development
Market:
increasing
new customers
Market
New development Diversification

Unrelated
markets
Related
markets
Copyright © 2008, C Appa Rao, B Parathiswara Rao, K Sivaramakrishna

17– 4 C Appa Rao, B Parathiswara

Strategic Management and Business Policy Text and Cases Rao, K Sivaramakrishna
Excel Books
 Part- III : Strategy Formulation and Choice
Ch-17: Ansoff’s Product/Market Grid

Comment
 Despite being nearly half a century old, Ansoff’s matrix is nonetheless still
valid, and is frequently applied by marketing strategists.
 In fact, revisiting his work makes one realize that some of today’s gurus
have either reinvented the wheel or copied it from him.
 Used in isolation, the model can do little to help determine the best strategy,
and the question as to which strategy would be most beneficial for a
company is still generally left unanswered.
 Rather, the grid serves as a means to describe product-market opportunities
and strategic options.
 As such, it forms an excellent framework for exploration, description and
strategic dialogue.

Copyright © 2008, C Appa Rao, B Parathiswara Rao, K Sivaramakrishna

17– 5 C Appa Rao, B Parathiswara

Strategic Management and Business Policy Text and Cases Rao, K Sivaramakrishna
Excel Books