Strategies for creative business development and growth using Ansoff’s Matrix (or Ansoff Matrix).
[Note: this article was updated in a response to the COVID-19 Crisis. See updated article which includes a new ‘COVID-19 Diversification Matrix’, adapted from the Ansoff Matrix, to devise strategic responses to COVID-19.)
When advising creative and digital businesses about strategic marketing and growth, this tool is useful to consider different options.
In a Masterclass I gave on creative business development in Ukraine, there was a question about developing new products for new markets, which reminded me of the matrix proposed by Igor Ansoff, which helped to answer the question. It was also part of a masterclass in Ireland and I have used it in creative business development with many of my consultancy clients.
Ansoff proposed four strategies for growth which can be neatly summarised in the matrix below:
1. ‘Market Penetration’ means selling more of existing products to existing markets. This is a matter of increasing market share without developing new products or approaching new customer segments.
2. ‘Product Development’ means growing through existing customer segments by offering new products to them.
3. ‘Market Development’ refers to selling existing products to new customer segments.
4. ‘Diversification’ means doing two things at once: developing new products for new markets.
Ansoff’s matrix provides a very simple but very effective focus for considering different options for growth, and provokes debate about whether to find new customers for existing products , offer more products to the existing customer base , or stay with existing products and gain a greater share of the current market .
Diversification , which is often the instinct of ambitious businesses, is the most risky growth strategy, because as the matrix shows so clearly, it means leaving the safety zone of both existing customers and existing products into a region of two unknowns.
Creative entrepreneurs can profit from making use of Ansoff’s Matrix to devise winning strategies for the creative business development and growth of their creative, cultural or digital businesses.