Can you acquire a product or white label a product with your brand?.How can your current product be altered within the 4Ps of Innovation?.What do your customers tell you? Is there demand for a particular service or product?.Are there obvious gaps in products or services that competitors offer?.How will you sustain innovation without derailing your existing business?.A good example of this is SalesForce with their CRM and then their sister product FinancialForce. This strategy has a mix of growth by new business and growth by upselling existing customers, and the advantage that if done successfully means cross selling can occur between the products. It’s where a business decides to develop new products or services targeting the existing customer market. The Product Development strategy is the one often associated with Innovation, even though Innovation can sit in many places in your strategy – see 4Ps of Innovation. What is the Ansoff Product Development strategy?
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Here’s an introduction to Porter’s Five Forces and a guide on how to complete your own Five Forces. If you’re exploring a new market, one tool to consider using is Porter’s Five Forces. How will it impact your internal teams (e.g.What is your current segment of customers and who is similar?.What is the competitive landscape like in your new market?.Is your industry similar across countries?.Can you rapidly scale your product or service?.The growth potential of this strategy is significant, but it requires you to pick the right market to enter and history is littered with examples of companies not getting it right. For example, you might want to move from the UK and begin selling to the US, or you might decide that your product or service would be fantastic for a completely different type of customer. The Market Development strategy is taking your existing products or services into new marketplaces, both geographic or customers. What is the Ansoff Market Development strategy? Read more about the Market Penetration Strategy. If you’ve got a successful niche and there’s significant growth in your market, then it’s a sensible decision to continue to focus and reap the rewards. This approach sometimes is viewed as just doing “more of the same”, which is perhaps unfair. Are other plays in the market moving or focusing, how well are they doing?.Are there competitors that you can acquire or work with?.How will you continue growth? Price decrease? Partnerships?.What’s your current market share and can it sustain growth?.If you’re picking this strategy then you’re objective is market share growth. The Market Penetration strategy is about focusing on your existing business, your current product or service, and your current segmentation. What is the Ansoff Market Penetration strategy? Diversification: Entering new markets with new products and/or services.Market Development: Entering new markets.Product Development: Developing your existing product and/or service.Market Penetration: Selling more of your existing business to existing customers.The four strategies in an Ansoff Matrix are: What are the four strategies of an Ansoff Matrix? Can’t be used on it’s own to decide your strategic direction.While risk is measured, reward is not factored into the tool.It doesn’t capture some of the detail of your market or position, eg competitors.It’s very simple to the extent that a lot of extra thought is required.What are the limitations of an Ansoff Matrix?Īs with every framework, there are some limitations to Ansoff Matrix such as: Highlights risk and ensures it’s discussed.It has a growth mindset and is designed to help businesses focus and develop.It can be used as a company tool or individual departments, such as Marketing.Helpful to classify your strategic choices and evaluate risk.An easy way to guide discussion of options.There are a number of advantages for Ansoff Matrix including: What are the advantages of an Ansoff Matrix? It’s also known as the Product/Marketing Expansion Grid. It works as a 2x2, housing four generic strategies that can be applied to your business, highlighting a default risk level for each one. It’s designed to effectively provide four strategic options and highlight the levels of risk associated to those for the business. The Ansoff Matrix (sometimes referred to as the Strategic Opportunity Matrix) is a strategic planning framework to help businesses develop and decide upon strategies for their growth. Igor Ansoff developed a matrix over 50 years ago that is still commonly used today by businesses and education institutes to help make decisions and pick a strategy.
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