Ansoff Growth Matrix: Get insights into your company's growth opportunities
Once you've gone through the long pile of segmentation models and marketing economic systems that have helped you create a sharp competitive and market-related strategy, you're most likely interested in continuing to increase growth. Ansoff's growth matrix offers four different paths a company can follow to grow. Read on to explore the model's usefulness and suggestions for growth opportunities.
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What is the purpose of the Ansoff growth matrix?
The Ansoff Growth Matrix is a relevant marketing model that provides an overview of companies' opportunities to grow and strengthen their position through a simple and clear overview. The model is not meant to replace the company's existing purpose and mission, but it should contribute to the opportunity to grow in an already competitive market.
Ansoff growth matrix - how to use it
Ansoff's matrix presents four different options that companies can try in the search for growth. All four are based on a combination of the company's current products and market intensifying.
The following four opportunities across existing and emerging markets and products are presented in Ansoff's growth matrix below:
Foto: <a href="https://amplify.dk/en/academy//ansoff-growth-matrix/">Amplify: Ansoffs vækstmatrice</a>
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 with existing customers
- Finding new applications 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 is based on factors that the company already knows. However, this also means that the potential is rarely as great as it is in the other strategies of the growth matrix.
Market development
Market development focuses on selling existing products in new markets. This method is often seen in well-established companies seeking new customers. Here it is relevant to seek out markets that could have the need that your product covers. There are two relevant methods to develop your market:
- Graphic expansion - both internationally and nationally
- Expand the market to new segments
However, this method is more resource-intensive as you 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 improvements or new product lines. Most companies will at some point in their lifetime improve and update their products. This can be done through three methods:
- Product improvement - functional or flavor customization of existing product
- New product - the product can meet a different customer need than before
- Range expansion
Diversification
Diversification seeks to sell new products in new markets. Companies will often only use this method once they have tried all three of the above. Diversification is the method that is the most difficult to succeed with, as it is resource-intensive to enter a new market where you don't necessarily have experience.
There are two types 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 connection between the new and previous products. This strategy is the riskiest growth strategy of them all.
Get help to grow or strengthen your market position
With this introduction to - or refresher on - Ansoff's growth matrix and its content, I hope that you have gained an insight into how you can further develop and work with your current marketing strategy in an effective and sharp way. An essential part of running an effective growing business is knowing the opportunities for continued growth.
If you need sparring and advice in the quest for growth and digital visibility, don't hesitate to send us a message. At Amplify, we are an SEO agency that not only knows how to work with internal and external factors - we are experts in reaching the target audience through both Google Ads advertising and SoMe marketing. Contact me or one of my colleagues at Amplify on tel. +45 70 60 50 28 or via email at info@amplify.dk.
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