December 14, 2010
— Posted By Michelle Cramer
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.
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.
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.
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.
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.
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.
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."