The Ansoff Matrix - explained.

When it comes to product and marketing plans, you can’t go far wrong using the Ansoff Matrix.  Also known as the ‘Ansoff Model’ and the ‘Product-Market Matrix’, it is essentially a simple and easy way to frame growth strategy through four options. 

The starting point is the market you currently operate in, and the products you are selling.


Market Penetration: If your market penetration is low, the aim should be to increase it (with the assumption you have a strong product . . .).

Requirements: Strong focus on sales activity and high reach advertising.

Lowest risk.


Market Development: Develop your marketing strategy by expanding to new geographies or targeting different types of customers.

Requirements: Learning how to adapt the product and marketing mix for new audiences.


Product Development: Targeting existing customers with compelling new products that increase revenue, profitability, or both.

Requirements: You need a strong innovation pipeline and ability to create excitement around product launches.

Medium risk.


Diversification: This means pursuing both ‘Market’ and “Product’ development at once.

Requirements: In most cases financial backing is the first hurdle to this approach.  If that’s there, then of course you need market and product development skills (as above).  But the crucial element is the right leadership and systems to manage the potential of rapid company expansion.

Highest risk.


Best practice tip: Use Ansoff once a year in strategic planning for your business to identify potential new markets, new products as well as product development opportunities.

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