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Ansoff Matrix

L1StrategyGrowth and portfoliodecisionStages 1 to 4

Reference model

The Ansoff MatrixA two-by-two grid. Columns are existing and new products; rows are existing and new markets. Market penetration (existing products, existing markets) is the lowest risk; product development and market development are medium risk; diversification (new products, new markets) is the highest risk.PRODUCTSEXISTINGNEWMARKETSEXISTINGNEWMarket penetrationSell more of today’s productsto today’s customers.Win share · raise usage · loyaltyLowest riskProduct developmentNew products fortoday’s customers.New models · features · servicesMedium riskMarket developmentToday’s products in newmarkets or segments.New regions · channels · sectorsMedium riskDiversificationNew products in new markets.New business areas,related or unrelatedHighest riskRisk rises with distance from what you already do

Moving right (new products) or down (new markets) takes you further from what you know, and risk rises.

About this model

Chooses a growth direction by combining two questions — are we selling existing or new products, into existing or new markets? — which gives four strategies of rising risk.

H. Igor Ansoff — “Strategies for Diversification”, Harvard Business Review · 1957

How to read it

  • Market penetration is closest to what you do today and carries the least risk; diversification changes both products and markets at once and carries the most.
  • List the concrete moves under each strategy, then rate the size of the prize, how well it fits your capabilities, and the risk.
  • Most businesses should exhaust penetration before moving outward — unless the core market is saturated.

What this does

Chooses the growth vector — penetration, market development, product development, or diversification.

When to use it

Once PESTEL/SWOT has surfaced the opportunity space and you need to commit to a direction.

What happens next

The chosen vector feeds Business Model Canvas (Channels, Customer Segments) and your GTM plan.

Golden thread

Builds on ←

  • pestel

Feeds into →

  • bmc

Framework library: Strategy and environment (layer L1), lifecycle stages 1 to 4.

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Hand-built by Eccellere and reviewed by Eccellere on 02/11/2026. Guidance, not advice: apply your own judgement.