The Ansoff Matrix is a way for companies to plan their growth, see shortcomings and the risks associated with a given growth plan. Designed by H. Igor Ansoff, the Ansoff Matrix is composed of 4 strategies: Market penetration, product development, market development and diversification. Within these four categories, market penetration is the safest and least risky whereas diversification is the most risky. As you scale, this matrix can help you to look at risk within each quadrant and help you develop a contingency plan that will affect your company. Revisiting the Ansoff Matrix on an ongoing basis will help you uncover additional risks.
Utilizing The Ansoff Matrix For Current Market Strategies
The goal of market penetration is to get further into the current market one is already in by strategically adjusting their product to make it more appealing to its target market.
Developing New Products With The Ansoff Matrix
In the product development stage, a company is designing and developing new products that will aid the current ones already in their market. By developing new products, a company is expanding its resources and products to further cater towards the market they are currently in. When a company creates new products, they are meeting the needs of the forever changing market.
Entering & Developing New Markets
The third stage is market development. In this stage, a company is taking their current and existing products into a new market that they have never seen before. The goal of this stage is to share products with those who are outside of their standard market.
Avoid Risk While Diversifying Your Products Using The Ansoff Matrix
The final and most risky strategy of the Ansoff Matrix is diversification. Now that a company has developed new products and is beginning to cater to a new market, there is potential for high revenue but with that potential comes very high risk.
Start Building Your Growth Plan Now
As you are developing your company’s market strategy and considering the tools and products needed for success, these growth strategy tools can be a key aspect to your companies market growth. Data driven strategic planning is the cornerstone for building repeatable, scalable processes that result in success at the rapid growth stage.
