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Tried and Tested – The Ansoff Matrix

Want to grow the business and not sure how to go about doing it? Ansoff matrix might be a handy way to think through the process.

Strategy Planning on Whiteboard

Key to making the process work is to ensure that you are honest about the growth plan and its costs.

The test should be, are we gaining incremental volumes and value. Sometimes initiatives like this can end up moving existing customers around, costing more by spreading those customers across different sales channels and worse, confusing them so they don’t even buy as much at the end of the initiative.

Ansoff matrix is a simple 4 boxes business model. It starts with current business and moves through finding more from existing, more custom like the current business, then what else might those people buy (NPD) through to new products and markets (diversification).

Ansoff matrix

Market penetration

The whole point of Ansoff is it addresses the key aims of the business, but it also makes you focus on what business you are in?

Who are we selling to, how often do we sell to them, how could we get them to buy more or more often? Is it awareness (advertising)? Is it promotions to increase the weight of sales? Bigger sizes, multiple-packs, or even pack-functionality to make it win on convenience? Sometimes a pack format such as a new closure can increase the usage occasions (think sports-cap on a conventional bottle making in-car usage or sports easier)

Market development

Where will we find more customers like the ones we have? Is it a simple geographic area that we can extend into i.e. we know a wholesaler serves a certain geographic area, can we find another wholesaler offering similar customers in a different geographic area? That should offer incremental sales. Perhaps it’s more about the channels such as retailers or eCommerce. Here we must be careful not to cannibalise our customer base by moving existing customers between channels but equally adding an eCommerce channel might access a new user base.

New product development

Then what else would our customers or potential customers buy from us? New product development. Does the brand or the products (e.g size, flavour usage occasion)

lend itself to being extended? This could be as crude as taking a breakfast-cereal and re-positioning it as a dessert. With just a new cardboard box with a different graphic to convey the new usage. You could even give it a whole new description so that the users don’t realise it’s the same stuff? More seriously reviewing the business capabilities. What can you make or fill into on your kit, what else can be made or filled on the same equipment or slightly augmented kit, that your existing customers might well buy? These days it could be the plant-based version of an existing product. Ice cream made with oat milk?


Lastly, if we diversify into other products or markets does our brand carry some customers along to give us a head start? Think of a powerful trusted brand that can deliver diverse products on the strength of its reputation. Sports drinks that move into energy bars. Or something more diverse, a brand associated with technology perhaps becoming a functional food? If you are familiar with Porters 5 forces then this exercise could include thinking about where your customers become competitors as they seek to diversify too. The Costa coffee shops producing ready-to-drink flavoured milk on a license basis. Perhaps you can license in or out a brand to tackle a new market opportunity.

We help our clients inject creativity into their strategic thinking and turn those ideas into value for the business. Read more.

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