Ansoff's growth matrix is a model developed by Harry Igor Ansoff, a Russian-American mathematician and business leader.

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He has authored many books on strategic management, including Ansoff's Growth Matrix, which provides a simple overview of a company's opportunities for growth and strengthening its position in the market.

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In other words, it provides an overview of whether resources should be spent on product development, marketing or internationalization.

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The model assumes that the company is in an already competitive market.

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The model provides 3 options:

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• Market penetration - selling more of existing products in existing markets. For example, by expanding the market by attracting new customers, additional sales, new uses for the product or by capturing competitors' customers.

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• Market development - that is, selling more of existing products in new markets. For example, new geographical markets or new customer groups.

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• Product development - selling new products in existing markets. For example, product extensions, product improvements or completely new products.

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Diversification means to diversify. And there are 2 forms - Conglomerate and Concentric.

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Conglomerate is about inventing a new business area that has no connection to existing products. Concentric is about synergy, i.e. new products for new customers, but where there is overlap with existing products.

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There are many opinions on this model. Many believe it is outdated because it doesn't take new technological developments into account. Our recommendation is that Ansoff's growth matrix should not stand alone. It is crucial that the company does thorough strategic work with a 360-degree focus, uncovering both strategic opportunities and threats while also addressing internal strengths and weaknesses.

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In a controlled way, we can now approach our strategy work without having to immerse ourselves in the theory and the various models. Here, the common models are gathered, compiled and translated in a way that is simple for us. Now we can spend our time on the content of the strategy rather than models.

Allan Pedersen

Owner &CEO

KJ Klimateknik A/S

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