Improve your business with the right growth strategy for your business.
Published 11 Aug 2023
The Ansoff Growth Matrix or Ansoff Matrix is a tool composed of four different business-growing strategies. It outlines different ideas and methods to grow your business and market presence based on what risk level you are comfortable with.
Created by H. Igor Ansoff and published in the Harvard Business Review in 1957 for an article called “Strategies for Diversification,” the Ansoff Growth Matrix aims to help businesses discover the right way for them to grow and diversify their operations. It consists of four strategies that range from least to most risky to execute, each with different factors considered.
The four Ansoff Matrix Growth strategies are the following:
This is the safest and least risky option for business growth since this involves only expanding product sales and profit in your existing market. With this strategy, little to no surprises await you, as you are already in familiar territory and will not be developing anything new. Common ways to deepen and expand your presence in your market include:
This strategy is considered slightly riskier than Market Penetration. Under this portion of the Ansoff Growth Matrix, you will need to develop and introduce a new product to your existing market. This will involve extensive research, testing, and refining.
Compared to Product Development, where you develop new products and offers for your existing market, this strategy involves sharing your existing product with an entirely new market instead. This can be done by discovering or developing new uses for your existing products to cater to a different market or niche or creating different marketing strategies for them based on who you want to target.
The difficulty or risk level between this Ansoff Growth Matrix strategy differs depending on your priorities, as well as what you consider to be more difficult to achieve.
This is the most risky and difficult business growth strategy among the four. Through Diversification, you will be introducing a new product or service to a new market. Although risky, this strategy can yield great results and profit, if done right.
Since its inception, the Ansoff Growth Matix has helped many businesses grow and explore different product and advertising methods to increase their revenue and recognition. It has also helped in conducting financial analyses and managing decisions, especially when used with other strategic management tools, such as the Boston Consulting Group (BCG) Matrix and the PESTLE analysis.
The Ansoff Growth Matrix is often used in this manner:
Lay the foundation of your chosen growth strategy with a detailed plan that outlines the strategy’s objectives, key milestones, timelines, and resource requirements. Define the roles and responsibilities of team members involved in the execution, and ensure that your plan is realistic and within your capabilities as a company.
Allocate the necessary resources to support your chosen strategy and plan of execution. This might involve budget adjustments, recruiting new talent, or enhancing technological infrastructure.
The tasks done in this step will vary per strategy. Here are a couple of things to consider:
Make sure to regularly test prototypes or concepts to ensure they meet customer expectations, then implement changes based on feedback to refine your offerings before launch.
Craft a compelling marketing and promotion strategy that communicates your strategy to the target audience. Create messages that highlight the value your new products or market expansion can bring. Utilize various marketing channels to maximize reach and impact.
Constantly monitor strategy implementation and performance. Are you meeting milestones? Are there deviations from the plan? Regularly assess progress and make adjustments as needed. Collect and analyze data to measure the strategy’s impact on key performance indicators.
Growth strategies evolve with market changes and customer feedback. Continuously track changes, iterate them, and improve based on the insights gained. Adapt to unforeseen challenges and embrace feedback to enhance the strategy’s effectiveness.
Additionally, make sure your employees are engaged in the whole process. Communicate the strategy’s importance, benefits, and how each team member contributes. A motivated and aligned workforce can drive strategy success, as well as better improve existing processes.
One way to manage and monitor business growth is to use a digital solution. With help from a digital auditing or operations platform, you can log market and business changes as they happen, all from the palm of your hand. This makes it easier to allocate time and resources to your business and streamline operations without sacrificing analysis, document management, and progress tracking.
A solution you can look into is SafetyCulture (formerly iAuditor), one of the leading mobile-ready auditing software providers today. SafetyCulture offers checklists from the Public Library and a smart form builder you can use to collect and analyze market and product data, record findings and market trends, and ensure your business’ growth is on the right track. All files are then stored securely in the cloud for easy access anytime and anywhere.
You can also do the following on SafetyCulture:
Roselin Manawis is a content writer and researcher for SafetyCulture. She has experience in news writing and content marketing across different fields of discipline. Her background in Communication Arts enables her to leverage multimedia and improve the quality of her work. She also contributed as a research assistant for an international study and as a co-author for two books in 2020. With her informative articles, she aims to ignite digital transformation in workplaces around the world.
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