Updated
The Ansoff matrix (product/market matrix) is a strategic tool that shows four ways a company can grow. It combines existing or new products with existing or new markets.
The four growth strategies
- Market penetration (existing product, existing market): sell more to current customers or win competitors’ customers, for example with better campaigns, loyalty offers or remarketing. Lowest risk.
- Market development (existing product, new market): enter a new country, region or customer segment, for example launching campaigns in Germany or Austria.
- Product development (new product, existing market): offer something new to the customers you already have.
- Diversification (new product, new market): enter a completely new field. Highest risk.
How to use it
Start with the strategy that has the lowest risk and best fits your resources. Most small and mid-sized companies grow fastest through market penetration and market development before they try new products.
Example from online marketing
An online store that sells well in Slovakia can first improve conversion rate and Shopping campaigns at home (penetration), then translate the store and launch ads in the Czech Republic (market development).
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