Business Knowledge

Corporate Strategy: Applied Frameworks

How Should Your Business Grow? The Ansoff Matrix

Use this simple 2x2 matrix to explore your growth options.

1. Market Penetration (Existing Product, Existing Market)

  • Question: How can we sell more of our current stuff to our current customers?
  • Action: Increase marketing, create a loyalty program, run a sales promotion.
  • Risk: Low

2. Product Development (New Product, Existing Market)

  • Question: What new stuff can we sell to our current customers?
  • Action: Launch a new feature, a premium version, or a related product.
  • Risk: Medium

3. Market Development (Existing Product, New Market)

  • Question: Where else can we sell our current stuff?
  • Action: Expand to a new city, a new country, or a new customer segment (e.g., selling a B2C product to businesses).
  • Risk: Medium

4. Diversification (New Product, New Market)

  • Question: What brand new stuff can we sell to brand new people?
  • Action: Launching a completely new business line.
  • Risk: High

Start with the lowest-risk options first. Don’t jump to Diversification unless you have a very compelling reason!