Critical Evaluation O Fthe Ansoff's Matrix

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Essay “Critical Evaluation of the Ansoff’s Matrix” In today’s competitive business environment, growth is often the prerequisite for survival for most firms. In order to realise growth, firms need a well-defined scope and growth direction. The Ansoff’s Matrix is one of the most popular matrices used in identifying the basic alternative strategies, which are options for a firm wanting to grow. The Ansoff’s Matrix presents the product and market choices available to an organisation. Herein markets may be defined as customers, and products as items sold to customers. (Lynch, 2003) Ansoff’s Matrix is a useful framework for looking at possible strategies to reduce the gap between where the company may be, without a change in strategy and where the company aspires to be. (Proctor, 1997) The Matrix proposed by Ansoff (1957), provides the useful framework for considering the relationship between strategic direction and marketing strategy. (Ansoff, 1957) According to Macmillan et al. (2000), “choice and strategic choice refer to the process of selecting one option for implementation”. Organisations in their usual course exercise the option relating to which products or services they may offer and in which market. (Macmillan et al, 2000) The Ansoff’s Matrix provides the basis for an organisation’s objective setting process and sets the foundation of directional policy for its future. (Bennett, 1994) According to Ansoff there are four basic growth alternatives open to a business. A business can grow through increased market penetration, market development, product development or diversification. (Ansoff, 1957) This essay elaborates the four strategies and provides critical evaluation of the alternative strategic growth paths available to business organisations, as identified by Ansoff’s Matrix (1957), drawing on relevant literature and with the aid of specific real
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