Ansoff matrix uses 2×2 matrix to represent four choices of enterprise development. Through the two dimensions of market and product, it can be divided into: 1 old products and old markets; 2 new products and old markets; 3 old products and new markets; Four quadrants of new products and new markets.
Enterprises can choose four different growth strategies according to their own conditions to achieve the goal of enterprise growth and income increase.
1. Old products, old markets-market penetration
Market penetration: Facing existing customers with existing products, adopting the strategy of market penetration, focusing on developing existing products in market portfolio, so as to increase the market share of products.
The advantage of market penetration is that the business focuses on the familiar markets and products, which can minimize the expenditure on market research and is the safest of the four growth strategies.
But stronger competitors will retaliate against companies that try to take away their customers and market share. This may lead to radical reactions, such as price wars, which will damage profits.
Therefore, once the existing market is saturated, enterprises need to adopt alternative strategies if they want to continue to grow.
2. New products and old markets-product extension
Product development: introduce new products to existing customers, adopt the strategy of product extension, make full use of existing customer relationships, or conduct differentiated competition with innovative products on the basis of stock market.
Product extension is usually to expand the depth and breadth of existing products, introduce new generation or related products to existing customers, and increase the market share of manufacturers in consumers' pockets. For example, headlines make it easier for people to get the information they want by actively pushing news, thus meeting people's personalized needs.
3. Old products, new markets-market development
Market development: use existing products to develop new markets and find more target customers. The market development strategy belongs to the marketing level strategy, which also needs relatively high capital investment and will bear relatively high market risks.
Often the product positioning and sales methods will be adjusted, but the core technology of the product itself does not need to be changed. An example of developing new markets for existing products is that sportswear manufacturers nike and adiads have successfully marketed their casual clothing products, not just sportswear.
However, the success of a product in one market does not necessarily guarantee its success in other markets. For example, it is difficult for Google to gain a foothold in China, and local company Baidu maintains about 70% market share in China.
4. New products and markets-diversification
Diversification: providing new products to new markets, the existing professional knowledge and ability of enterprises may be useless and face too many uncertainties, which is a risky diversification strategy.
Most successful enterprises can achieve some synergy in core knowledge (know-how) such as sales, channels or product technology, otherwise the failure probability of diversification is very high. Both product maturity and market acceptance are facing more challenges and tests.
Therefore, if there is no strong strength and grasp, it is not recommended for small brands to try diversification, a high-risk strategy.
When we use Ansoff matrix, we usually analyze the decisive factors in the four quadrants of the matrix from the perspective of products and markets. The core steps are as follows:
(1) First consider whether the existing products can gain more market share in the existing market (market penetration strategy).
(2) Secondly, consider whether we can develop some new markets (market development strategies) for its existing products;
(3) reconsider whether it is possible to develop some new products (product development strategies) that have potential benefits to its existing market;
(4) Finally, consider whether we can take advantage of our own advantages in products, technology and market. And adopt the integration strategy (diversification strategy) to make the enterprise develop in depth according to the direction of material flow.
As mentioned above, Ansoff matrix should be treated with the idea of transformation and dimension upgrading, that is, the possible changing direction of products should be reviewed regularly and timely to adapt to the rapid changes of new and old markets; At the same time, in space, we should also think about the possible development direction of the product, whether it can meet the needs of users in different regions, in order to maximize the realization of enterprise growth goals!