Once you have gone through the long pile of segmentation models and marketing systems that have helped you to lay out a sharp competitive and market strategy, you are most likely interested in continuing to increase growth. Ansoff's growth matrix offers four different options that a company can follow to grow. Read on to dive into the model's usefulness and growth opportunity suggestions.
Ansoff's growth matrix is a relevant business model that provides an overview of companies' opportunities to grow and strengthen their position through a simple and clear overview. The model is not intended to replace a company's existing purpose and mission, but to contribute to its ability to grow in an already competitive market.
Ansoff's matrix presents four different options that companies can try in search of growth. All four are based on a combination of the company's current products and market intensification.
The following four opportunities, spread across existing and new markets and products, are presented in Ansoff's growth matrix below:
Foto: <a href="https://webamp.dk/academy/ansoffs-vaekstmatrice/">Webamp: Ansoffs vækstmatrice</a>
The market penetration method seeks to increase the company's sales in existing markets with their existing products. For example, companies can:
Market penetration is also the easiest strategy to work with, as it builds on factors that the company already knows. However, this also means that the potential is rarely as great as in the other growth matrix strategies.
Market development focuses on selling existing products in new markets. This approach is often seen in well-established companies seeking new customers. Here it is relevant to seek out markets that might have the need your product addresses. There are two relevant methods to develop your market:
However, this method is more resource-intensive, as you will need capital to enter a new market and market to a new group.
The product development approach focuses on selling new products in existing markets. This means that companies will typically focus on developing product enhancements or new product lines. Most companies will, at some point in their life, improve and update their products. This can be done through three methods:
Diversification seeks to sell new products in new markets. This is a method that companies will usually only use once they have tried all three of the above. Diversification is the most difficult method to succeed in as it is resource intensive to enter a new market where you may not have experience.
A distinction is made between two forms of diversification:
With this introduction to - or refresher on - Ansoff's Growth Matrix and its contents, I hope you have gained an insight into how you can further develop and work with your current marketing strategy in an effective and incisive way. An absolutely essential part of running an effective growing business is knowing the opportunities to keep growing.
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