Framework
Ansoff Matrix
Four growth strategies plotted across products and markets.
Summary
The Ansoff Matrix is a 2x2 that plots growth options: Market Penetration, Market Development, Product Development, and Diversification.
History
Devised by Igor Ansoff in 1957, originally for corporate growth planning.
How it works
- Map current products and markets.
- Identify which quadrant each growth idea sits in.
- Weigh risk vs return: penetration is lowest risk, diversification highest.
Advantages
- Clear, fast lens
- Forces explicit risk awareness
Limitations
- Skips execution detail
- Two axes hide nuance
Examples
- - A bakery expanding to a new city (Market Development)
- - Adding catering (Product Development)
Implementation guide
- - Score growth ideas weekly during planning
Ansoff Matrix - FAQ
- Is diversification always risky?
- Yes, structurally. It is appropriate when core markets are saturated or threatened.
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