Rather, it maximizes on the value and capital of your existing product and customer base.īenefit: This strategy is low-risk as it leverages many of the company’s existing offerings.ĭrawback: Market penetration strategy is an inherently limited approach for long-term, high-growth companies. Note: This approach does not involve expansion into new markets or product innovation. Using this strategy, the organization tries to increase its market share in its current market scenario. The market penetration quadrant of the Ansoff matrix helps you determine strategies to sell more of your existing products or services to your existing customer base through aggressive promotion and distribution. That’s a great start, but how do you grow those sales and learn more about the customers using your product? You’ve identified a market for it, and you’ve been able to demonstrate demand through consistent sales. Here’s a look at each strategic approach in the Ansoff matrix. This risk analysis will help you make the best choice for your organization. Next, look at the risks associated with each one, and develop a contingency plan to address the most likely risks. Start by plotting your strategic options into the appropriate quadrant. It also depends on how much risk you’re currently willing-or able-to take. Is your product new or existing? Are you trying to disrupt an existing space? Your approach-and the resulting risks-will depend largely on your company’s maturity, current state, and long-term roadmap. To use the Ansoff growth matrix, you must first align around the business goal you’re trying to accomplish. Selecting a product market growth strategy The matrix itself is quite self-explanatory, which makes it an effective tool to gain buy-in as a company collaboratively evaluates and moves from one quadrant of the matrix to another.

The benefits of the Ansoff matrix lie in its simple 2x2 matrix design and ability to quickly convey your company’s current state and potential risk factors. By looking at ways to grow via existing products and new products, and in new or existing markets (customers), the matrix outlines four possible areas of opportunity for growth, which vary in risk: Igor Ansoff, the Ansoff growth matrix offers a simple and useful way to think about product and market development strategy.

What is ansoff matrix