Ansoff's growth matrix: gain insight into your company's growth opportunities

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:

Market penetration
The market penetration method seeks to increase the company's sales in existing markets with their existing products. For example, companies can:

• Increase market share - by attracting new customers
• Increase standard quality
• Increase consumption by existing customers
• Finding new uses for the product
• Get more of your target audience to buy the product

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
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:

• Graphic expansion - both international and national
• Expand the market to new segments

However, this method is more resource-intensive, as you will need capital to enter a new market and market to a new group.

Product development
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:

• Product improvement - function or taste adapt existing product
• New product - the product may meet a different customer need than before
• Product range expansion

Diversification
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:

• Concentric diversification
  Companies introduce new products to new markets where there is a common thread to their existing product portfolio.
• Conglomerate diversification
  Companies introduce new products to new markets where there is no link between the new and previous products. This strategy is the riskiest growth strategy of all.

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.

If you need sparring and advice in your quest for growth and digital visibility, don't hesitate to send us a message. At Webamp , we are a SEO agency that not only knows how to work with internal and external factors - we are experts in targeting both through Google Ads advertising and SoMe marketing. Contact me or one of my colleagues at Webamp on tel. 70 60 50 28 or by email at info@webamp.dk.