Page 16 - 5.2 i. Manac Finance ITC Summarised Notes

STRATEGY AND GOVERNANCE

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Analytical tools for assessing the feasibility of

strategies

Ansoff’s Product-Market Growth Matrix

• The Ansoff Product-Market Growth Matrix is a tool created by Igor

Ansoff with the aim of providing entities with growth strategies. The
following represents the four strategies that entities can pursue to
achieve product and market growth:

• Market penetration: Within this strategy growth is achieved without an entity
deviating from its original product market strategy i.e. growth can be achieved
by increasing sales volumes to existing customers or by making sales to new
customers.

• Market development: This entails achieving growth by entering new markets.
• Product development: Growth is achieved by developing new products for the
existing market.
• Diversification: This entails an entity simultaneously changing its product line
and target market.

• It should be noted that practically most entities would follow several of
the above strategies at the same time.

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