The Ansoff Model is a matrix that helps marketing leaders
identify business growth opportunities for their marketing
strategies in a challenging market
What is the Ansoff Model?
Also referred to as the Ansoff matrix, due to its grid format, the Ansoff Model
helps marketers identify opportunities to grow revenue for a business through
developing new products and services or "tapping into" new markets. So it's
sometimes known as the ‘Product-Market Matrix’ instead of the ‘Ansoff
Matrix’.
The Ansoff Model's focus on growth means that it's one of the most widely
used marketing models. It is used to evaluate opportunities for companies to
increase their sales through showing alternative combinations for new
markets (i.e. customer segments and geographical locations) against products
and services offering four strategies as shown.
How to use the Ansoff Matrix
Strategic questions that can be answered using the matrix include:
•
Market Penetration: How to sell more of your existing products or
services to your existing customer base?
•
Market Development: How to enter new markets?
•
Product and Development: How to develop existing products or
services.
•
Diversification: How to move into new markets with new products or
services, increase your sales with your existing customer base as well
as acquisition.
You may be executing more than one of these strategies depending on the
stage in your business,
My best practice tip is to use Ansoff at least once a year in strategic planning
for your business to identify potential new markets, new products as well as
product development opportunities.
To evaluate the suitability of these strategies, issues to consider for each of
these:
1. Market Penetration: change your opening hours of your store,
reduce order processing times, showcase entire product portfolio etc.
2. Market Development: Does your research on your market share in
your existing sectors back up potential demand for you to considering
entering new markets? Considering search intent for services in
different markets, for example, using Google Keyword Planner or
Ubersuggest can also inform this. Can your company support this
with existing resources?
3. Product and Development: Can you you develop new products,
perhaps using cheaper manufacturers, improved quality, updated
packaging. Again market research to ask potential customers and
influencers for feedback can help here.
4. Diversification: Assess expertise, technical know-how. Can you
move into a new market with a new product offer using the skills in
your business? Do you have a strong management team to support
it.