Given the state of the economy, focus is returning to organic growth. The seminal organic growth strategy model is the Ansoff Matrix, first published in the Harvard Business Review in 1957. What is the Ansoff Matrix, and how does it help sales and go-to-market?
The Ansoff Matrix is a 2x2 framework designed to evaluate organic growth strategies involving new markets and or new products. Markets occupy the vertical axis, and products or offerings occupy the horizontal axis. Each square in the Ansoff Matrix equates to a specific organic growth strategy –
Market Development (bottom left) – Selling existing products in new markets.
Market Penetration (top left) –Selling existing product in existing markets.
Product Development (top right) –Selling new products in existing markets.
Diversification (bottom right) –Selling new products in new markets
The definition of Market can also read as Customer or Segment or Sector to align with your current business. The key is to make decisions based on where the company's efforts will be focused. As there is no correct answer, many of our clients have allocated a proportion of their resources to more than one quadrants in an evolving matrix over the next three to five years. As an example they're allocating 20% of their resources to Market Development and 80% to Market Penetration.
There are no right answers and the value in this comes from knowing where to point your sales team.
Almost as important, is that your Ansoff growth strategy informs you of what is NOT a focus. This directs sales teams at the most valuable customers, segments and sectors.