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The Ansoff Matrix In A Nutshell
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived by whether the market is new or existing, and the product is new or existing.
According to the Ansoff matrix, you can evaluate a growthstrategy based on whether you’re trying to grow in an existing market with an existing product (market penetration). Whether you will try to grow in a new market with the same product line (market development). Whether you will try to grow by developing new products in the existing market (product development). Or growing by developing new products for new markets (diversification).
Market penetration
In a market penetration scenario, the company grows by leveraging its existing products, thus trying to increase its market share in its current market.
Therefore, the company will either try to sell more to its customers or to expand its customer base. In this scenario, the company is not trying to expand the boundaries of its market, rather increase its presence on that market.
In short, the company grows by leveraging on its products, within its defined market.
Market penetration case study
Since its inception, Google has been able to grow its market share in search, year over year. By simply leveraging on its core product (the search engine) the company has been able to grow consistently to dominate the search market.
Market development
In this scenario, the company grows by leveraging its products to expand in new markets. Thus, the company will try to make its product available in new markets, geographies.
Market development case study
When Facebook started to roll out, in the early years. The company followed a gradual traction model. Where it opened to more and more universities first, in the US. Then moving to other niches and markets, until it opened to anyone.
Product development
In this scenario, a company grows by developing new products for the existing market, for instance, by developing new products that can benefit the same customer base.
Product development case study
As Instagram was expanding its market share in the social media space, it started to experiment with new features that enabled it to gain more traction within the same market, thus growing quickly.
Diversification
In this scenario, a company grows by going beyond its market boundaries and by developing whole new set of products. Based on the degree in which the new product line and the market is adjacent compared to the existing market (related diversification) and a product line or it goes far beyond it (unrelated diversification).
Diversification case study
When Apple launched the iPhone, back in 2007, it risked cannibalizing its most successful product, the iPod. Yet when the iPhone was out, in a few years would create a whole new category (smartphone) much bigger than that of music player devices. Thus, making Apple develop an entirely new market as a consequence of launching a whole new product.
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.
A SWOT Analysis is a framework used for evaluating the business‘s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful businessproduct portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived by whether the market is new or existing, and the product is new or existing.
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.
A digitalchannel is a marketingchannel, part of a distributionstrategy, helping an organization to reach its potential customers via electronic means. There are several digitalmarketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces
In his book, “Competitive Advantage,” in 1985, Porter conceptualized the concept of competitive advantage, by looking at two key aspects. Industry attractiveness, and the company’s strategic positioning. The latter, according to Porter, can be achieved either via costleadership, differentiation, or focus.
Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. The model was first published in Michael Porter’s 1990 book The Competitive Advantage of Nations. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.
Developed by American academic Michael Porter, the Four Corners Analysis helps a business understand its particular competitive landscape. The analysis is a form of competitive intelligence where a business determines its future strategy by assessing its competitors’ strategy, looking at four elements: drivers, current strategy, management assumptions, and capabilities.
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