# Ansoff Matrix

**Framework:** Ansoff Product-Market Growth Matrix  
**Use for:** Growth strategy — choosing which combination of existing/new products and existing/new markets to pursue, and understanding the risk profile of each path.  
**Time required:** 45–60 minutes. Works best as a structured conversation with leadership before committing to a growth initiative.

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## How to use this template

1. **Clarify what "new" means.** A new market can mean a new geography, a new customer segment, or a new use case. A new product can mean a variant, a complementary product, or a completely different category. Be specific about which dimension you're crossing.
2. **Understand the risk gradient.** Market penetration is the lowest risk (doing more of what you already do). Diversification is the highest (new product + new market simultaneously). Most companies should default to market penetration and market development before pursuing diversification.
3. **Use it to evaluate options, not just current direction.** Map your existing growth initiatives on the matrix. Are they clustered in one quadrant? What's missing?
4. **It's a risk framing tool, not a decision tool.** The matrix tells you the risk level of a direction. Deciding whether that risk is worth taking requires separate analysis.

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## Company / initiative being analyzed

**Company or business unit:** _______________  
**Current core product / service:** _______________  
**Current primary market / customer segment:** _______________  
**Date:** _______________

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## The Ansoff Matrix

```
                    EXISTING PRODUCTS         NEW PRODUCTS
                    ___________________       ___________________
                    |                 |       |                 |
EXISTING MARKETS    | MARKET          |       | PRODUCT         |
                    | PENETRATION     |       | DEVELOPMENT     |
                    |                 |       |                 |
                    | Lowest risk     |       | Medium risk     |
                    | Sell more of    |       | Create new      |
                    | what you have   |       | offerings for   |
                    | to who you      |       | existing        |
                    | already serve   |       | customers       |
                    |_________________|       |_________________|
                    |                 |       |                 |
NEW MARKETS         | MARKET          |       | DIVERSIFICATION |
                    | DEVELOPMENT     |       |                 |
                    |                 |       |                 |
                    | Medium risk     |       | Highest risk    |
                    | Take existing   |       | New product +   |
                    | offerings to    |       | new market      |
                    | new segments    |       | simultaneously  |
                    | or geographies  |       |                 |
                    |_________________|       |_________________|
```

---

## Quadrant 1: Market Penetration *(Existing product + Existing market)*

**Risk level:** Low — you know the product and the customer  
**Goal:** Increase share of existing customers, or attract more of the same type of customer

**How could we grow here?**
- Increase purchase frequency or volume from existing customers: _______________
- Improve conversion of leads we're already generating: _______________
- Reduce churn to retain more customers longer: _______________
- Capture share from competitors serving the same segment: _______________

**Specific initiatives we're considering:**

| Initiative | Owner | Timeline | Expected impact |
|---|---|---|---|
| | | | |
| | | | |
| | | | |

---

## Quadrant 2: Market Development *(Existing product + New market)*

**Risk level:** Medium — you know the product, not the customer  
**Goal:** Take what you already build into new segments, geographies, or use cases

**Which new markets are we considering?**
- New geography: _______________
- New customer segment: _______________
- New use case or vertical: _______________

**What do we need to learn or build to serve this new market?**

- _______________
- _______________

**Specific initiatives:**

| Initiative | Owner | Timeline | Expected impact |
|---|---|---|---|
| | | | |
| | | | |

---

## Quadrant 3: Product Development *(New product + Existing market)*

**Risk level:** Medium — you know the customer, not the product  
**Goal:** Create new offerings for customers you already know and serve

**What new needs do existing customers have that we don't address?**

- _______________
- _______________

**What adjacent products or features would they logically want from us?**

- _______________
- _______________

**Specific initiatives:**

| Initiative | Owner | Timeline | Expected impact |
|---|---|---|---|
| | | | |
| | | | |

---

## Quadrant 4: Diversification *(New product + New market)*

**Risk level:** High — unknown on both dimensions  
**Goal:** Enter an entirely new space; only justified when existing markets are saturated or the opportunity is too large to ignore

**Why are we considering diversification rather than the other quadrants?**

_______________

**What gives us the right to win in this new space?**

_______________

**What would failure cost us?**

_______________

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## Portfolio view: where are our current initiatives?

Plot your existing growth initiatives in the matrix below by writing their names:

| | Existing products | New products |
|---|---|---|
| **Existing markets** | | |
| **New markets** | | |

**Is our portfolio appropriately balanced? Are we over-concentrated in one quadrant?**

_______________

**What does this suggest about where to focus or de-invest?**

_______________

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*The Ansoff Matrix was developed by Igor Ansoff in his 1957 Harvard Business Review article "Strategies for Diversification." Covered in the Frameworks & Mental Models Guide on biztechprimer.com.*