Ansoff's Matrix

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Ansoff's Matrix

Advantages

  • The Matrix forces market planners to think about risks with going in a certain direction
  • Lays out possible growth straregies
  • It focuses the business
  • Sets out the aims and objectives needed to succeed
  • Presentable to Stake holders, so that they understand what direction the business is taking
  • Assesses all options and alternatives, and shows the opportunity cost associated with all of them
  • Create's a risk aware culture in the business
  • Indicates level of relevant risk to the business

Disadvantages

  • Fails to show market development and that diversification will need to have changes
  • Only a theoretical model
  • Doesn't take into account the activities of external competitors
  • Can cause by paralysis by analysis, meaning the business does so much analysis that it doesn't make a decision
  • Can result in plans that are too optimistic
  • It is extremely difficult to do accurate predictions, due to unforeseen events effecting results
  • There are often conflicting objectives of business stakeholders, meaning the analysis could just get neglected of action

Evaluation

The use of Ansoff's matrix is useful, but in conjunction with other planning models. It's role is mainly to provide an outline of alternative methods of achieving the businesses final aim of growth

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