A Simple & Effective Growth Model: The Ansoff Matrix in Action.

Every company needs to grow - but how, and where? The Ansoff Matrix creates four simple choices that help us evaluate options, simplify decisions and take action.

Developed by Igor Ansoff in 1957, the Ansoff Matrix excels in helping execs, teams and companies boil their growth plans down to simple terms that can be used by all stakeholders involved in the decision making process.

Igor, a mathematician and business manager, combines the logic of maths with the skill of good business management to give us four paths to growth. Different requirements and implications apply for each which I will explore below through the lens of some real world experience from my career so far.?

In my time I have worked across all four quadrants in different scenarios and below are just some of my many experiences on each. For the sake of simplicity I will call every unit a business sells a ‘product’.

1. Market Penetration: growing existing products in existing markets.

In every scenario I’ve ever operated in, the business has needed to sell more of its existing products in its existing markets. In one scenario there was an entirely underdeveloped sales channel - E-commerce. I set to work developing an e-com solution and the supporting infrastructure (sales, marketing, customer support, supply chain etc) but it also raised another great question: brand. Was the ‘brand’ working hard enough to support the growth I was targeting? It wasn’t, so I addressed that too as part of a wider marketing strategy.

2. Product Development: launching new products in existing markets.

I have developed both physical and digital products. The Go-to-Market strategy is largely the same, in principle. In existing markets you have one key benefit - a customer base to leverage when consulting, developing, testing and ultimately bringing to market new products. The feedback, guidance and validation from your customer base is priceless, however there will always be surprises when you launch.

A second benefit is intelligence from being operational. You will know how to play to the strengths and weaknesses of the company based on your company, market and competitor data, you can therefore plan your strategy accordingly.

3. Market Development: launching existing products into new markets.

While the growth opportunity of a whole new market is an exciting opportunity, a big question that needs addressing is the culture.

I’ve entered 15 new markets and not one of them has been the same. UK, Europe, Asia, Middle East, Americas. This also includes different markets within a territory, all with their own distinct culture.?

Doing business in one market is not like doing business in another. Entering new markets can be done in many ways depending on the scenario - partners, agents, subsidiaries, distributors, licensing and more. Finding the right solution will unlock the success you’re targeting and facilitate growth. It will also, more often than people might want to admit, not deliver the expected results on the first attempt and require a rethink.

4. Diversification: launching new products in new markets.

New products in new markets present a double unknown - unlike other quadrants in the matrix this strategy has the highest risk as both the market and the product are unproven. Market specific partners have helped me solve this in the past. The local expertise, relevant experience with similar brands and ‘boots on the ground’ are key. With that said, finding the right partner can be challenging, and is not always successful on the first attempt. Trade shows have, in my experience, been a great way to make the contacts required to diversify in this way. Trade show strategy could easily be the subject of another newsletter.

Final Thoughts

It’s common to focus on one quadrant and not take action on another - invest everything into Market Penetration for example, but ignore Market Development.

Every growth strategy should start by identifying which quadrant fits your strengths, and if you plan to move into a ‘weaker’ quadrant then your strategy must adapt accordingly. What actions do you need to take to become 'stronger'?

The Ansoff Matrix is a simple model that brings clarity to complex growth decisions. No matter which quadrant you operate in, growth is rarely linear and the best plans often require a rethink and a change of plan to unlock the growth required.

Which quadrant are you focusing on right now??

And what unexpected challenges have you faced in your growth strategy??

Drop a comment below and let me know your thoughts - I’d love to hear your experiences and share more from mine. A fascinating topic when applying this theory in the real world!

P.S. I have a long list of other thoughts I brainstormed while writing this (yes, I wrote this, not AI) that might bring you some value.

Connect here and I'm happy to share.

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