Remember the Ansoff Matrix?
Remember the strategy tool that helped you determine a growth strategy for a business? The product/market matrix that made you play around with 4 options for growth by matching up existing and new products with existing and new markets. It was first launched in the Harvard Business Review in 1957 and became a loyal companion to many while working on case studies in university. But how relevant is Mr Igor Ansoff's thinking 60 years later in a world that seems dominated by start-ups who are constantly introducing new and innovative business models?
A trusted guide in the evaluation of growth opportunities
There comes a time for every business -whether it is a well respected multinational or a buzzing start-up to evaluate growth opportunities. Moving from one growth strategy to another comes with excitement, but also with risks. Can the investment be justified? Is the right level of innovation available? Are the required competencies in place?
Helping businesses build the required compentencies for their growth strategy is the essence of what we do at BizDevCorp. In order to develop the most relevant product offering for our customer we regularly consult Ansoff's strategy. As a result we recently added new services to our portfolio. The most exciting one for us is the recent launch of VILT production, which in Ansoff terms can be characterized as 'product development'.
Yet, the growth strategies of Ansoff are also guiding us in creating the best work for our customers. For an Irish car insurance company we recently assisted with the development of a revolutionary insurance product that centers around the high premium consumers have to pay. Instead of charging an annual premium, we helped to develop a supplier credit that allows the consumers to pay in installments at limited additional costs. This type of product development (Ansoff!) is meeting a consumer need. Sales of the car insurance have increased heavily since launch.
Recommended use for businesses: once a year
In short, businesses that use the Ansoff matrix can determine the best strategy for increasing sales. The matrix can help decide how to do this by demonstrating the options clearly, breaking them down into the four strategies. It also helps to address the potential risks of replacing one growth strategy for another.
Many marketing professionals advise that the Ansoff matrix should be used annually to determine whether a business needs to improve or adjust existing offerings or venture into new markets. At BizDevCorp we support this recommendation.
So, happy 60th birthday Ansoff strategy! May you continue to provide insight for many years to come.