Ansoff matrix
Overview
What is the Ansoff Matrix?
The Ansoff matrix is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future business growth.
Ansoff Matrix adresses four strategies
Market penetration: find new ways to make your existing product more appealing and successful within the market.
Some questions to ask yourself :
What’s your current market share and can it sustain growth?
How will you continue growth? Price decrease? Partnerships?
Are there competitors that you can acquire or work with?
Are other players in the market moving or focusing, how well are they doing?
Market development:: move your product / service to a new market
Some questions to ask yourself
Can you rapidly scale your product or service?
Is your industry similar across countries?
What is the competitive landscape like in your new market?
What is your current segment of customers and who is similar?
How will it impact your internal teams (e.g. Marketing)?
What’s the new market size?
Product development: create new product / service for an existing customer base.
For example;
Create a new product / servce that appeals to your current audience,
Develop a service related to your existing products / service,
Partner with businesses to offer a package deal that includes your product,
Acquire a competitor and using their value to increase your own.
Some questions to ask yourself :
How will you sustain innovation without taking limited risk?
Are there obvious gaps in products or services that competitors offer?
What do your customers tell you? Is there demand for a particular service or product?
Can you acquire a product or white label a product with your brand?
Can you partner with businesses to provide services or become a channel partner?
Diversification: create new product / service for new customers.
Some questions to ask yourself :
How can you diversify, is there a product or service that is related to your current offering?
What framework will you use to test the ideas and concepts?
What level of risk and investment can you tolerate?
How strong are the competition in your new market?
What is the overall goal?
What is the potential return?
How do your current strengths and weaknesses align to the needs of the new offering?
Steps
Step 1 - Create your matrix (or use a template)
Step 2 - Consider your options:
Plot the potential strategies you can pursue in each quadrant
Step 3 - Run a risk assessment:
Identify the ways you are putting your business in danger and the potential challenges involved
Step 4 - Plan for your risks;
Create contingency plans that address these risks. Focus on the risks with the highest probability and level of impact
Step 5 - Select your approach asking the right question:
You are struggling to attract new customers? Consider market penetration or market development
You've reached the limit of your current market? Consider diversification or product development
Your customers or market studies describe unmet needs? consider product development
Template
