|
 The product/market grid
of Ansoff is a model that has proven to be very useful in business unit strategy
processes to determine business growth opportunities. The product/market grid
has two dimensions: products and markets.
Over these 2
dimensions, four growth strategies can be formed:
- market
penetration,
- market
development,
- product
development, and
- diversification.
Market Penetration:
Company strategies
based on market penetration normally focus on changing incidental clients
to regular clients, and regular client into heavy clients. Typical systems
are volume discounts, bonus cards and customer relationship management.
Market Development:
Company strategies
based on market development often try to lure clients away from
competitors or introduce existing products in foreign markets or introduce
new brand names in a market.
Product Development:
Company strategies
based on product development often try to sell other products to (regular)
clients. This can be accessories, add-ons, or completely new products.
Often existing communication channels are leveraged.
Diversification:
Company strategies
based on diversification are the most risky type of strategies. Often
there is a credibility focus in the communication to explain why the
company enters new markets with new products. This 4th quadrant
(diversification) of the product/market grid
can be further
split up in four types:
- horizontal
diversification (new product, current market)
- vertical
diversification (move into firms supplier's or customer's business)
- concentric
diversification (new product closely related to current product in new
market)
- conglomerate
diversification (new product in new market).
Although already
decennia old, the product/market grid
of Ansoff remains a valuable model for communication around business
unit strategy processes and business growth.
See also:
Blue Ocean Strategy
| Relative Value of
Growth
| Positioning
| Porter Competitive
Advantage
|
Parenting Advantage
|
Prahalad
|
BCG Matrix
|
Greiner
|
Kay
|
Mintzberg
|
3C's
More management models
|
