Design Business Strategy

Ansoff Matrix

The Ansoff Matrix is a business analysis strategy which helps you understand you business better and the risks it provides.

The risk level increases from right to left and from top to bottom.

Market Penetration, this when existing products are sold to an existing market.
Market Development, is when existing products are sold to new market.

The above only apply to existing markets or businesses, but since my product is new I would concentrate more on the new market and new products sections of the matrix.

Product Development, is a growth strategy where a business aims to present new products into existing markets.
It also manipulates the strength of an existing business, it also helps the business owner understand more the needs of customers, hence effective market research and successful innovation. It also allows the business owner exploit existing customer base.
In order to use this strategy effectively one must make sure that the business is the first to be in the market.

Diversification, this is a risky strategy or approach. It has no experience with the product or market hence making it entirely a new venture.  Initially it has a low economic scale that is to say might not fetch you as much as you expect in the beginning, however if it is successful the over all risk of the business is spread.
There are three major ways by which you can tackle diversification;

• being innovative and good research and development, to help you invent new solutions 
• you could also take over an existing business in the market
• you could extend and existing business by partnership or other means into your market

This task has made me understand that setting up a business is not something done in just a day, it requires research to help you understand the kind of business you are starting and also allow you to understand the need of knowing you market before setting up any business.