The Ansoff Matrix
The Ansoff Matrix helps define and ideate growth strategies for individual products and markets. It was developed in 1957 by Harry Igor Ansoff, an American economist. In addition to the Ansoff Matrix, it is also known as the Product-Market Matrix/Expansion Grid or the Z-Matrix. The Ansoff Matrix includes four quadrants "Market Penetration", "Market development", "Product Development", and "Diversification".
For whom it is useful
The primary task of Product Managers and a company's leadership is to adopt the right strategy for growth. The Ansoff Matrix is an easy-to-use tool to support this.
When to use it
The goal of any business is to generate growth. Without growth, a company will quickly be caught up by its competitors and may be forced out of the market. Therefore, the Ansoff Matrix is useful for organizations wanting to identify and explore their growth options regarding their existing and new products.
How to use it
Use Sticky notes to map out your product strategy and options. Start with your existing market and products in the quadrant "Market Penetration", and add your ideas. The color of the quadrants also reflects the risk of the go-to-market.
Refer to the included example of Coca-Cola to see how you can work with this framework.
Annotations
The Ansoff Matrix originated in the 1950s and therefore reflects the corporate strategic thinking of the time. The Ansoff Matrix is quite simple as it is based on only two factors: products and markets. Competition is not taken into consideration in this model.
Nevertheless, the Ansoff Matrix is a fundamental framework taught by business schools worldwide and provides a quick way to ideate and map out product growth options.
