Ansoff Matrix
Classic portfolio model for growth strategies.
PURPOSE
Companies need to make growth decisions but often don't know which strategic direction offers the best risk-to-opportunity ratio. The Ansoff Matrix makes the four fundamental growth options visible and helps with conscious decision-making between them. It is particularly useful in strategic planning and portfolio decisions.
HOW TO USE
The leadership team positions current and planned initiatives in one of the four fields of the matrix. The discussion revolves around whether growth is pursued through existing or new products in existing or new markets. The matrix serves as a discussion basis for prioritizing growth initiatives.
WHAT IT IS
The Ansoff Matrix is a 2x2 portfolio model developed by Igor Ansoff in 1957. It distinguishes four growth strategies: Market Penetration (existing products in existing markets), Market Development (existing products in new markets), Product Development (new products in existing markets), and Diversification (new products in new markets). Each field has a different risk profile, with diversification carrying the highest risk.
EXAMPLE
Example: Your software company is no longer growing with its existing product and you need to decide: bring the existing product to new markets or develop a new product for existing customers? The Ansoff Matrix shows you the four growth options with their respective risks. You make an informed decision for a market development strategy toward Scandinavia.