I like matrices and, marketing, like most disciplines has its fair share of them.

One of my favourites is the Ansoff Matrix.  This matrix highlights the strategic direction a business could take if it wants to grow.


The matrix considers four possible options.  These are:


  1. Market Penetration
  2. New Product Development
  3. New Market Development
  4. Diversification


Each option has an element of risk.


Option 1 is the least risky because the idea is simply to do what you’re already doing.  If you know your product and your market well, you should be on a strong footing. You may upset some of you competitors though who won’t be so happy that you’re looking for more market share.


Developing a new product or market, options 2 or 3, increases the element of risk a little. However by doing one or the other, you’ll always have at least one foot on familiar ground.


Whether you develop a new product or a new market the key is to do your market research.  Market research provides a foundation that makes the ground more solid.  It won’t take out all the risk but it will give you the confidence that you’re taking a productive route.


Diversification is the riskiest of the four options.  This is mainly because you’re trying to do two things at the same time.  A safer way to diversify is to acquire.   With an acquisition you get the experience and knowledge too.  A positive management culture within your acquired business will be one critical success factor.


Whichever option you chose, base the choice on sound research, test your assumptions and keep a close eye on the market.  Good luck!

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