Mastering thematrix of Ansoffinforms every growth option, whether you are in SMEs or internationally. With this structured reading of products and markets, both old and new, it becomes possible to distinguish concretely the strategies ofmarket penetration, market development, product development and diversification. It is regularly seen as the reference tool for organizing, explaining or reliably comparing different strategic development scenarios.
Ansoff Matrix: how to read and apply it through a concrete example
Do you want to quickly grasp the logic of the matrix of Ansoff with an example immediately mobilizable? Find an ultra-practical explanation to customize, which simplifies your presentations or compares in minutes.
The matrix of Ansoff takes the form of a 2-axis table: on one side the types of products (existing / new), on the other side the targeted markets (existing / new). Four main strategies result from this:market penetration, market development, Product developmentanddiversification. Each angle presents a different level of risk and innovation, an aspect often commented on by strategy practitioners.
Let's look at an immediate case: IKEA. With a turnover ofEUR 2.79 billionIn 2020, the company experimented with penetration via special offers on its flagship products, tried to develop the market thanks to its openings in new countries, launched ecological ranges (product development) and went so far as to offer advice services at home (diversification). Some marketing managers appreciate how this tool makes these growth choices visible and "cartography" in a blink of an eye.
Need to take concrete action? Download a PDF model or test an interactive tool to apply the custom method. It is regularly observed that these practical options are widely supported in the best-rated online references.
Summary of key points
- ✅ The matrix of Ansoff crosses products and markets to define four growth strategies.
- ✅ Each strategy presents a different risk, illustrated here by the concrete example of the IKEA.
- ✅ Practical tools such as PDF and interactive templates facilitate the field application.
Definition of the matrix of Ansoff
To structure an effective growth strategy, relying on a readable framework changes the data. Here is the essential to understand on this essential matrix.
What is the purpose of the Ansoff matrix?
Designed in 1957 by Igor Ansoff, this matrix aims to facilitate the work of teams, whether they be an SME or a global group, to choose between four main strategic axes: to act on the product, on the market or on both. Many students in business schools quickly adopt, and it remains a guide for companies who want to clarify their growth decisions.
Another regularly noted point is that the matrix is valuable when it comes to prioritizing development paths, clarifying product/market logic, or developing a growth plan without leaving room for ambiguity. A consultant said that in a meeting, the gridded version is easily needed to unlock collective thinking.
Good to know
I recommend using the Ansoff matrix to clearly prioritize your growth paths and facilitate team decision-making.
How to read the product/market matrix?
Keep in mind this basic scheme: one crosses, on one side, existing/new for products; the other, existing/new for markets/customers. This cutting reveals four distinct boxes:
- Market penetration: existing products sold in current markets
- Market development: same product, new target markets
- Product development: innovations for your existing customers
- Diversification: moving forward on new products and markets
Expert media such as those of Asana or Manager GO! recommend, for example, combining a color palette or a 2×2 table – making the process memorizable and very communicable at a team point.
Presentation of the 4 strategies: differences, risks and examples
Each quadrant has its strengths, its limits, as well as classic corporate illustrations. Let us take stock of their operational specificities.
Market penetration: the "safest" strategy
It's about strengthening your current positions: selling more and more to your existing customers. Simplicity often bears fruit: promotions, loyalty campaigns, lower prices. It is noted, for example, that McDonalds multiplies "menu of the day" or "2 for 1" offers to encourage the recurrence of purchase.
The risk remains moderate according to Ansoff, as the product, market and customer parameters are known. Several trainers recall – this strategy requires only limited investment, but growth potential can quickly cap. Some traders claim to have reached this saturation point faster than imagined...
Market development: conquering new customers
Here, it is about bringing your current offers to segments, regions or countries where you are not yet positioned. Take IKEA: withEUR 2.79 billionof which15 %On-line, the group continues to open new outlets or adapt its site to local specificities.
In addition, this choice often involves investments in logistics processes, marketing targeting or field recruitment. The level of risk depends, among other things, on the cultural or commercial "distance" with your home territory. An expert in retail explained that this is never an automatic transposition!
Product development: innovation on your customer base
Here, the temptation is to bring something new to its customers. One can think of Apple, which, after iPhone, alternately offers AirPods, connected watches or integrated digital services.
There is often a significant risk: investing in R&D for a base that has already been conquered, and there is nothing to guarantee that novelty will impose. Many start-ups run out on this field, while large, better-edged brands layer their launches on a loyal customer base (it happens that a product is hard to impose despite the brand's aura).
Diversification: the most risky bet
Simultaneously changing markets and products: diversification is often described as the most demanding strategy, a source of apprehension that is understandable, since it is committed to an unknown terrain. Examples? Sony in insurance, Google in autonomous car... We have seen some brilliant successes, but also quickly abandoned attempts.
The risk here reaches its maximum, and it is generally wise to conduct a methodical analysis (including the SWOT or PESTEL matrix) to identify all threats and opportunities. He said that for an SME, sometimes a diversification requires patience; Some leaders prefer to test smoothly, step by step, not to mobilise all energy on a single bet.
Example schematic and application guide (IKEA case)
To make the matrix even more tangible, nothing is worth applying to a well-known brand. Here is a case in point: perfect for a presentation as well as for a decision meeting in SMEs.
Example table: The Ansoff matrix applied to IKEA
It is simplistic: four boxes, each illustrated by a concrete action led by IKEA.
| Strategy (quadrant) | Example IKEA (2020) |
|---|---|
| Market penetration | Promotions on best-selling sofas, drive acceleration and e-commerce (+15% CA online) |
| Market development | Store openings in India and South America, site adaptation in several languages |
| Product development | Launch of an ecological range, new connected products, green delivery services |
| Diversification | Creation of the space planning service and decoration consultancy (excluding historical activity) |
For a local SME, you could adjust as follows:
- Focus on increased fidelity or discovery offers to strengthen the main activity
- Target new neighbourhoods to explore, or inaugurate a second point of sale
- Imagine a new range or related service in response to customer needs
- Develop a complementary activity, e.g. training, counselling, renting
A trainer recently pointed out that such a "case-to-case" exercise clarified ideas before any decision was taken.
Test these ready-to-use models, or start your own online table: many teams are aware of the extent to which these tools, usually free of charge, are fluidizing their exchanges.
Steps to apply the method in 30 minutes
You don't need to be a specialist to experiment with the matrix. Here are some key points to activate:
- Identify all your products or services, and map your current customers
- Try to identify possible developments: new products, segments or territories
- Attribute each new idea to the most suitable dial in the matrix
- Weigh in detail the risks, investments required and fit with your internal skills (Make sure you stay realistic!)
- Operate a first hierarchy, supported if necessary by an ultra-fast SWOT view
In3-5 a.m., an organized team usually manages to build a coherent roadmap; A management student, for his or her part, often serves to create a well-linked strategy file (it is not uncommon to cross in competitions).
Enrich and secure the process: links with SWOT, PESTEL & Co
To solidify decision-making, it is best to cross the Ansoff matrix with other strategic analysis tools. Experienced consultants like to use this type of alliance.
Matrice Ansoff and SWOT: essential complementarity
The Ansoff matrix illuminates "what" (what growth directions?), while the SWOT refines "why" and "how" by exploring strengths, weaknesses, opportunities and threats. It can be assumed that most COMEXs rely on this association:2020between 60 and 65 per cent of the growth plans submitted mixed different tools.
In addition, it is often recommended to convene the BCG matrix (to analyse product portfolios), the PESTEL scheme (for the global environment), or the Porter 5-force model (for the competitive game). It is not uncommon for a team to juggle with multiple tools as needed.
Is it still relevant to cross these methodologies? In practice, a simple "mapping" session reveals in some cases unsuspected strategic evidence, which one external stakeholder has already observed more than once in company workshops.
Good to know
I advise you to combine ansoff matrix with SWOT to better understand not only the growth axes, but also their associated strengths and risks.
FAQ – Common questions about the d
Even the very accustomed sometimes fall into classic traps. Browse these answers to avoid frequent errors and you will take over the matrix of Ansoff with confidence.
What's the Ansoff matrix? What's the point?
A tool to help think about is called a tool that can sweep all the growth paths of a company by crossing them with product/market combinations, while integrating the risk level of each scenario.
What are the 4 strategies? A simple example?
• Penetration: Boost sales to known customers (e.g. cafeteria offering 1 coffee for 5 consumed)
• Market development: opening up to new segments with an existing offer (e.g. opening a point of sale in another city)
• Product development: launch a new offer to its core audience (e.g. offer a vegan menu in a family pizza room)
• Diversification: explore a whole new universe (e.g. pizzaiolo creates a fine grocery store)
Product or market development: how can we not be mistaken?
This is a question that often comes up: if the product evolves with the same clientele, it is called "product development" (new desserts for usual customers). If it is the customer who changes while the offer remains the same, this is a case of "market development". Reversing these two dimensions means making a plan inapplicable, a challenge that several trainers have already observed in their audits.
Is diversification always risky?
This is a double jump in the unknown: new customers, new offer. Few SMEs start alone without a progressive test. Moreover, it is better to focus first on "connex" diversification (related to its specialty) rather than on a large strategic gap. Some entrepreneurs testify to being supported by micro-pilots before taking the step.
Does the Ansoff matrix replace the SWOT?
No, these tools enrich each other. Better frame the growth axes with Ansoff, then use the SWOT to objectively gauge the chances of success of each option.
Can we combine multiple strategies at once?
Absolutely, many major groups orchestrate different axes according to the subsidiaries. For a TPE or an SME, the ideal remains to structure and test a strong angle before engaging on a second. Several consultants point out that progressivity promotes success in smaller structures.
To move forward in complete serenity, download a PDF guide, test an interactive model or ask for a strategy advisor: many free tools are valued at about4,8and4,9/5by their users, based on returns2024.