What is the Ansoff Matrix

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The Ansoff Matrix is corporate growth strategy model. It is composed of a grid with four sections. Market penetration, Product development, Market development and Diversification.

Market Penetration is when a company expands organically (builds) or inorganically (buys). This is usually the ‘safest’ option.

Product Development is when the company develops new product lines or services or improves existing ones.

Market Development is expansion by targeting new markets, this can be within the same country or in other countries.

Diversification involves targeting a new market which the business is not already in, whilst creating a new product or service for that new market. This strategy carries the most risk. An example of a company that has done this very successfully would be Virgin.

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