Ansoff Matrix

The Ansoff Product-Growth Matrix is a marketing tool created by Igor Ansoff in order to portray alternative corporate growth strategies, focusing on the firm's present and potential products and markets (customers). By considering ways to grow via existing products and new products, and in existing markets and new markets, there are four possible product-market combinations.

Ansoff's matrix provides four different growth strategies:

• Market Penetration - the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share.
• Market Development - the firm seeks growth by targeting its existing products to new market segments.
• Product Development - the firms develops new products targeted to its existing market segments.
• Diversification - the firm grows by diversifying into new businesses by developing new products for new markets.

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BCG Matrix

The Boston Consultancy Group Matrix is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's. It is based on the observation that a company's business units can be classified into four categories based on combinations of market growth and market share relative to the largest competitor, hence the name "growth-share". Market growth serves as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive advantage. The growth-share matrix thus maps the business unit positions within these two important determinants of profitability.

Characterize Your Enterprise

The expert system will position your enterprise on the chart based upon your description of:

• Share of market
• Condition of the market You can trace through the supporting analysis and its conclusions, adjusting your input until you are satisfied your description accurately characterizes your enterprise

Analysis of Your Enterprise Position

Stars - High growth/High share

Business is likely to generate enough cash to be self sustaining. Recommended tactics:

• promote aggressively
• expand your product or service
• invest in R & D

Cash Cows - Low growth/High share

Business can be used to support other business units.

• defend & maintain

Question Marks - High growth/Low share

Business requires a lot of cash to maintain market share.

• invest more cash
• or, divest

Dogs - Low growth/Low share

Business is a cash trap.

• focus on short term
• avoid risky project
• limited future

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