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Ansoff Matrix Advantages And Disadvantages

What are the weaknesses and strengths of Igor Ansoff's model, called the the Ansoff Matrix? Have any other theorists developed or improved a more modern model based on the same idea?

The weaknesses of Ansoff's Matrix include its inability to factor in things like competitor activity and consumer opinion. Its strengths include its ability to weigh up various options and examine the risks associated with each option. Other theorists to come up with models more modern than the Ansoff Matrix include Michael Porter with "Porter's Five Forces" and Albert Humphrey with the "SWOT analysis."

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The Ansoff Matrix (The Product/Market Expansion Grid), is a model used by firms to analyze and plan their strategies for growth. The matrix shows four strategies that can be used to help a firm grow and also analyzes the risk associated with each strategy.

The four strategies are:

  • Market Penetration.
  • Product Development,
  • Market Development,
  • Diversification.

The advantages of Ansoff Matrix are:

  • It forces market planners and management to think about the expected risks of moving in a certain direction,
  • It lays out possible strategies for growth.
  • It focuses on the business.
  • Sets out aims and objectives.
  • Presentable to stakeholders.
  • Assessment of alternatives- shows opportunity cost.
  • Creates a risk aware culture.
  • Indicates level of risk and relevant risk.

The disadvantages of Ansoff Matrix are:

  • It fails to show that market development and diversification strategies require a change to every day running of the business.
  • It’s only a theoretical model.
  • It does not take into account the activities of external...

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