Strategy models - Ansoff's grid
by Alex Roan on Oct 4, 2024
Whilst working as a consultant I’ve found this framework simple, but useful. When an organization is planning ahead it provides a way to think about the focus on current products, services and markets in alongside opportunities to developing new products/services and/or enter new markets.
- Market penetration
- Product development
- Market development
- Diversification
How to use it
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Assess the performance of your current products/service in your current market and identify opportunities for growth. There may be a wide range of ways to do. For example; new marketing campaigns and increasing sales team staffing.
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Consider opportunities to enter new markets with existing products/services. For example; new markets may mean new geographies, or new customer groups.
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Consider opportunities to build new products/services to sell in existing markets. Leveraging your capabilities, competitive advantage and synergies can be important here.
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Consider opportunities for new products/services in new markets. This can be a new product/service that leverages your core business, or a shift into a completely new product and market area.
Key considerations
- You need to start from a solid analysis of your current performance and clear understanding of your capabilities and competitive advantage
- When you think of each opportunity, consider:
- How does it leverage your competitive advantage?
- How does it leverage your capabilities?
- Are there synergies?
- What’s the level of risk?
- What’s the feasibility?
- It it something you can build towards with your current organization?
- Do you need to make an acquisition to acquire knowledge, scale and customer base?
- Ansoff helps identify opportunities and describe a potential future, but you also need to build a roadmap to get there and assess things like cost, time, resources required etc.
Example
Consider a soft drinks company selling two soft drink brands in three countries, they may consider these options
