Strategy

A simple tool for strategic growth

I was recently working with a group of religious leaders who are trying to decide how their congregations should move forward in light of the challenges caused by COVID-19. They are used to in person services, educational programs, and community building events. Unfortunately, opportunities to bring people together in person will be limited for an extended period of time. 

Ansoff Matrix - Wikipedia
(From https://en.wikipedia.org/wiki/Ansoff_Matrix)

I introduced them to the Ansoff Matrix which is a tool developed by Igor Ansoff that can be used to explore opportunities for organizational growth. On the left side, the existing market (or customers) are on the bottom and new markets on top. On the bottom row, there are existing products and services on the left and new products/services on the right.

The bottom left box (Market Penetration) focuses on existing markets and products/services. Focusing on this box can result in growth through increasing market share or penetration. The top left box (Market Development) focuses on growth through existing products but new market(s).

By focusing on the bottom right box (Product Development), we strive for growth through existing markets with new products/services. The top right box (Diversification) focuses on new markets and new products/services. It is important to note that risk increases as one moves up or to the right of the matrix with the top right box having the most risk.

I encourage organizations to complete the Ansoff Matrix through divergent and convergent thinking. They can begin by individually or collectively generating opportunities for growth in each box of the matrix. After the team divergently identifies possibilities, they can converge by discussing the most promising opportunities. Here are examples of possible discussions that can take place for each box:

Bottom left (Market Penetration):

  1. Begin by discussing existing market (customers)
  2. How might we sell to more people like our existing customers?
  3. How might we encourage existing customers to use more of our existing products or services?

Top left (Market Development):

  1. What demographic groups are not existing customers?
  2. How might we identify new market segments that could benefit from our existing products or services? 
  3. How might we market our products or services to appeal to different demographics than our existing customers?

Bottom right (Product Development):

  1. How might we add value to our existing customers through new products or services?
  2. Are there related products or services that our customers could benefit from?

Top right (Diversification):

  1. How might we adapt to changing trends in society?
  2. Are there new opportunities that we are uniquely positioned to capitalize on?

The Ansoff Matrix is not perfect. When looking at new opportunities for growth, organizations need to consider factors such as competition, organizational strengths, and assets. A common strategy for growth today is a merger or acquisition, and it is possible that a merger or acquisition may help accelerate market penetration, new markets, new products, and/or diversification. 

The Ansoff Growth Matrix is one of many tools that can be used for developing strategy. We work with a wide variety of organizations to develop strategy for future success and growth. There are many approaches to successful strategic planning processes, and it is important to customize a process that best meets your organization’s needs. If you are interested in learning more about how we can help your organization develop a strategic planning process, please contact us

T.A. Dickel Group, LLC is located in Evansville, Indiana, and we focus on enhancing organizational leadership, strategy, and creativity in the surrounding region.

Dr. Tad Dickel is a leadership, strategy, and creativity consultant who works with businesses, nonprofits, colleges, schools, and churches. He received a Certificate in Family Business Advising from the Family Firm Institute, a Certificate in Nonprofit Board Consulting from BoardSource, a Certificate in Fundraising Management from The Fund Raising School, a Certificate in Foundations of Design Thinking from IDEO U, and holds a Ph.D. in educational leadership from Indiana State University. Tad is a Certified Basadur Simplexity Thinking Facilitator and Trainer, Certified Basadur Profile Administrator, and Myers-Briggs Type Indicator (MBTI) Certified Practitioner.

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