Igor Ansoff, often called the father of strategic management, was the first to make strategic planning a business management activity in and of itself. Prior to his research, businesses lacked strategies to base future growth on. Companies extrapolated future growth based on their annual budgets with little strategy to deal with mergers, diversification or economic turbulence.

According to Ansoff theory, the key components of business strategy are a clear market scope (knowing exactly what products and services your company is responsible for), growth vector (the four strategies for business growth), competitive advantages and synergy (how the whole of a company's opportunity for growth is greater than the sum of all its parts). The Ansoff matrix diagram shows four different strategies for business growth:

1. Market penetration involves expanding the market share of the business within the scope of existing products and market segments.

2. Market development means using Ansoff's theory to target existing products to new market segments.

3. Product development is the process of marketing new products to an existing market segment.

4. Diversification is growth by diversifying into new products and markets.

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Learn about the life and research of Igor Ansoff

Explore the origins of Ansoff's management theory. Ansoff was a Russian immigrant who overcame language barriers to become a professor and start his own consulting firm, where he continued his work until he was 82 years pf age.

I recommend: See The Free Library by Farlex for a short biography of Ansoff, a summary of his key theories and a list of books written by Igor Ansoff. The Economist gives a more detailed discussion of Ansoff's life and contributions.

Get to know the management theory of Igor Ansoff basics

There are many management theories and all have advantages and disadvantages. Find what works for you.

I recommend: QuickMBA.com describes Ansoff's matrix theory in detail, including the advantages and disadvantages to each of the four approaches to growth as well as the varying levels of risk involved. At Strategy Vector Model you can find a discussion of Ansoff's theories about economic turbulence.

Use Ansoff's theory to grow your business

Put your knowledge of Ansoff theories into action with help or on your own.

I recommend: Ansoff Associates International, the firm founded by Ansoff, is still serving clients. Visit Mind Tools for information on using the Ansoff matrix to plan your best course of action for business growth. MBA Publishing has a detailed case study of a company putting strategic management into action.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  The best way to learn about Ansoff theories is to go straight to the source and read his original writings.
• •  Ansoff coined the phrase 'paralysis by analysis,' which indicates there is such a thing as too much planning.

Igor Ansoff has been called the "Father of Strategic Management." A pioneer in his field, Ansoff developed a number of completely new corporate management concepts, combining them with earlier strategic management methods already in use to create a new strategic management paradigm. Through his work, strategic planning became an established management activity.

Among other things, Ansoff's theory addressed the 5 levels of turbulence which he determined to be present in the business environment. According to his theory, to be effective, a company's strategy needs to match the level of turbulence present in its environment. Because your company's turbulence level so strongly impacts its strategy, understanding these levels can give you a good start in developing a more profitable business. Ansoff's 5 levels of environmental turbulence follow.

1. Repetitive: slow, predictable change

2. Expanding: gradual growth, marketplace stability

3. Changing: incremental growth, varying requirements

4. Discontinuous: both predictable and complex change exist together

5. Surprising: unpredictable change which both spawns and stems from new products/services

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Understand the concepts of Ansoff's management theory and how management strategy can benefit you

Obtaining a thorough background in the management theory of Igor Ansoff can provide a launch pad for developing an effective strategic management plan for your business.

I recommend: The Free Library offers a detailed explanation of key Ansoff theories and discusses the components of corporate strategy. FreeBizPlan analyzes and compares Ansoff's theory to other theories of strategic management, giving you greater insight into the topic and allowing you to choose the strategic management model that's most appropriate for your company.

Take advantage of consulting services that can help give you greater insight into Ansoff theory

Strategic management consulting firms provide experts who have enough knowledge and experience in strategic planning methods such as Ansoff's management theory to help you incorporate those methods into your own company's environment. Their guidance can prove extremely useful to new businesses or business owners who have little experience with strategic management theories.

I recommend: Auxis and Boston Consulting Group both offer strategic management consulting services.

Access online tools to help you put the management theory of Igor Ansoff into practice

A number of tools available online make the job of implementing the various aspects of Igor Ansoff management theory a much simpler process.

I recommend: Mind Tools offers guidance in using the Ansoff matrix diagram to evaluate your options and help you manage business risk more appropriately and profitably. (The site also offers an Ansoff grid for assessing career-related personal risk.) Marketing Teacher illustrates the gap analysis theory of Ansoff, which uses Ansoff's matrix to provide strategies for bridging the gap between where a company is currently and where it needs to be.

Get training in strategic management that will help you better implement Ansoff theory

The Igor Ansoff strategic management theory is a complex topic, as is strategic management in general. Yet, an effective approach to strategic management is critical to your company's success. So, plan to take advantage of available training opportunities for both you and your staff.

I recommend: American Management Association offers various seminars in strategic business management, which are available both at remote locations and on-site. You'll find even more detailed information about AMA seminars at FindaSeminar. OakTraining.com provides strategic management training software to help you develop your staff, as well as yourself, in strategic management topics. And, Center for Management & Organization Effectiveness offers training in strategic management at various off-site locations, along with a customized-curriculum option. (Click the "Custom Solutions" tab.)

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Never underestimate the value of effective strategic management to your company. Because of its intrinsic importance to the day-to-day operation of your business--as well as to its long-term success--it would be advisable for you to seek every avenue of opportunity for improving your understanding of the topic. If your budget is small, take advantage of free information and tools available online and consider advancing to paid training or consulting services when they become more affordable to you.

The Igor Ansoff strategic management theory has been a stronghold of many institutes since the publication of his book, 'Corporate Strategy' in 1965. When business globalization was still in its infancy, Ansoff concentrated his work on business expansion and diversification. Ansoff's management theory is a responsive approach to economic outlooks in the face of ever growing and ever more diverse competition.

Mathematician and businessman, Igor Ansoff was well qualified to teach and write about effective strategic planning. His management theory is famous to business leaders of today for its emphasis on planning the future goals and focus of a given business. When considering management theory of Igor Ansoff education and training:

1. Know Ansoff theories provide solid foundations for management strategies

2. Understand that Ansoff's matrix theory is fundamental to application of his concepts

3. Grasp that businesses using management theories provide structure and direction to employees

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Read articles on Igor Ansoff to improve understanding of his management theory

The Internet abounds with information about Igor Ansoff and his work on strategic planning as a part of effective management. Understanding more about the man himself and the basic concepts behind his theories before attempting to apply them in the workplace is a smart move for the modern manager or business owner. Informative yet easy to read articles provide a good foundation for further research and education.

I recommend: The Economist provides a brief but informative article on Igor Ansoff as part of its 2008 management series. Farlex, as part of its free library, offers a biographical look at Ansoff, explains his key theories in layman's terms and provides a bibliography for further research. RapidBI has a nice article on Ansoff that includes examples of his matrix diagram.

Train employees on the Ansoff matrix diagram to improve foundational understanding

The Ansoff diagram illustrating the four sections of growth options (market development, diversification, market penetration and product development), provides clarity on how much risk each future expansion step will have on the already established market. Used by management, marketing and business owners alike, the matrix diagram is a core component of training of Ansoff theory.

I recommend: Mind Tools has a basic explanation of the Ansoff model with explicit diagrams. Marketing Teacher offers a one page lesson on the matrix model from a marketing approach.

Learn more about the management theory of Igor Ansoff in the classroom or workshop

The theory of Ansoff is often the subject of business management and marketing classes. Professors often assign his published works as stand alone textbooks in business school. Yet, classes and certification courses dedicated strictly to Ansoff are rare. Strategic planning workshops often use his diagram as a starting point for training and exploration and many management consultancy firms implement his theories.

I recommend: Founded by Ansoff himself, Ansoff Associates International is a consultancy firm that offers information, training and articles on strategic planning as well as consultancy services for small business. ISBNdb.com provides a list of Ansoff's published books with links to purchase or download. AOL has several online video tutorials on Ansoff's theory including footage from college class lectures.

Most know Igor Ansoff, a Russian emigrant to the United States, as the father of corporate strategy. He was the first one to emphasize planning and strategizing as part of the managerial position in a business. He firmly believed that a successful strategy, and the implementation therein, leads to the growth of a company. This article addresses Ansoff's strategic theories and the key elements that contribute to their success.

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Product Market Growth Matrix

The Product Market Growth Matrix, also known as the Ansoff Matrix, is a means of determining the best possible growth strategy for your business through products and markets. The four possibilities, existing and new products and markets, produce a number of combinations for your growth strategy.

I recommend: Visit Mind Tools or QuickMBA for details on the Ansoff Matrix.

Strategic Management

Ansoff found four main components of strategy for managing a business. Among them are the product-market scope, the growth vector and the competitive advantage.

I recommend: Read more about Ansoff Strategic Management from Easy Strategy.

Synergy

Synergy is the fourth element of Ansoff's Strategic Management Theory. Ansoff defined synergy as '2+2=5.' In more straight forward terms, Ansoff viewed the whole picture as greater than all of its parts.

I recommend: A paper by Mikael Iversen provides more information on the concept of synergy.

Gap Analysis

Gap Analysis is a fundamental element of strategic management. Ansoff believed that any new strategies should fill the gap left by the current business practices.

I recommend: Access the Free Business Plans section of Ismall-Business for information on the three variables of Gap Analysis. Marketing Teacher has information on different types of Gap Analysis.

Environmental Turbulence

Ansoff believed that each corporation can face environmental turbulences while its competitors are facing something different or nothing at all. It is because of these environmental turbulences that Ansoff believed companies had to individualize management strategies based upon their obstacles, and not society's.

I recommend: Discover the five levels of Ansoff's environmental turbulence from The Free Library.

Paralysis by Analysis

Ansoff recognized that the application of his theories can sometimes result in too much analysis of business practices and planning change, rather than implementation in the process of change and growth. He called this procrastination 'paralysis by analysis.'

I recommend: Read more information on Igor Ansoff's management theories, including paralysis by analysis, on The Economist website.