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Ansoff and Boston Matrix

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Ansoff matrix: New product development is an option in the Ansoff's product-market growth matrix, a instrument used by business to identify numerous options a business could adopt to increase its sales. Depending on the aims and objectives of the business, and strategy it wants to adopt, the Ansoff matrix will suggest one of four options which are shown below in a table I found on the search engine 'Google'. Market penetration - the safest option, based on selling more to existing customers. Market development - seeking new channels of distribution or selling in different geographical areas. Product development - selling new products into the existing market, with all the risks associated with a new product. Diversification - the area of highest risk, based on developing new products for new markets. Market penetration is one of the four growth strategies as defined by Ansoff. Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers. Other ways include attracting non-users of your product or convincing current clients to use more of your product/service. ...read more.


This is because I am currently in the early stages of developing my beer, meaning I am a new competitor entering an age old market. My competitors are at different stages in the Ansoff matrix, and like me they all had to start form the 'product Development'. For example, Coors is at the stage of market penetration with its product 'Coors light' because they are selling the existing product onto an already existing market and they want to sell to more people within the market. They created Coors light because a lot of their business would come from women who are increasingly worried about weight and image. Boston Matrix: Like Ansoff's matrix, the Boston Matrix is a well known tool for the marketing manager. This is simplistic in many ways and the matrix has some understandable limitations that will be considered later. Each cell has its own name as follows. Dogs These are products with a low share of a low growth market. These are the canine version of real turkeys. ...read more.


This stage is very risky for me and also for any business because it is make or break time for my product. Stars These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Someday hopefully if my product is successful and generates more money than it takes to produce it I will be a star or perhaps even a cash cow. Cash Cows, Problem Children and Stars need to be kept in balance. The funds generated by your Cash Cows are used to turn problem children into Stars, which may eventually become Cash Cows. Some Problem Children will become Dogs, meaning you will need a larger contribution from the successful products to compensate for failed products. Cash Cows These are products with a high share of a slow growth market. Cash Cows generate more than is invested in them. If someday my product reaches cash cows I will be making more of a profit because they make more money than it costs to produce them, for me this will be better because I will be making more money and won't have to put in any extra time or energy. ...read more.

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