7/19/2021 Tip: The Expansion Grid | Growthink

7/19/2021 Tip: The Expansion Grid

Today’s Quote

“You’re always too old to be childish. You’re never too old to be childlike.”
~ Denis Kiely

 

Today’s Tip

The Ansoff Matrix, also called the Product/Market Expansion Grid, details the four most common ways you can grow your business. These four methods are selling:

  1. Your existing products to existing customers
  2. New products to existing customers
  3. Your existing products to new markets
  4. New products to new markets

 

Graphically, you can see the Ansoff Matrix as follows:

The key to the Ansoff Matrix is to understand that certain opportunities have higher risks of failure.

Specifically, selling your existing products to existing customers (“market penetration” – existing products, existing markets) is the least risky, since you have already proven that you can do it. Opportunities here are generally to try new marketing channels that let you reach more customers like your existing customers.

Offering new products to your existing customers (“product development” – new products, existing markets) requires that you take a bit more of a risk, since you don’t know for certain whether they will buy the new products. But since you already know and have a relationship with these customers, you have a relatively high chance of success.

Next, offering your existing products to new markets (“market development” – existing products, new markets) is even a bit riskier, since you don’t have relationships or a track record with customers in those markets.

And of course, finally, the riskiest opportunity is to sell new products to new markets. (“diversification” – new products, new markets) Offering a new product to a new market bears the risk of not knowing the customers and/or if your product or service will resonate with them. That’s not to say you shouldn’t try this; just that you must weigh the potential success against the increased potential for failure.

Most companies make the mistakes of:

  • not judging new opportunities as they relate to the Ansoff Matrix (and thus assume unnecessary risk) and
  • not diversifying their growth strategy enough and only operating in one of the Ansoff Matrix quadrants

 

Today’s Resource

How to Build a $10 Million+ Company

What’s the difference between successful multi-millionaire entrepreneurs and the typical small business owner just struggling to get by?

Well, there are a LOT of differences, actually…

But I’ve summarized the main differences on this page:

How to Build a $10 Million+ Company <—- 

The really interesting part is that you don’t have to work yourself to death to grow a wildly successful, eight-figure business…

In fact, when you follow this formula, you can make much more by working less…

How to Build a $10 Million+ Company <—- 

 

Trivia

Today’s Question: How did Google’s famous ‘page-rank’ algorithm get its name?

Previous Question: Which financier was known as the ‘Junk Bond King’ in the 1980’s era of Wall Street and also served time for insider trading?

Answer: Michael Milken

He was highly influential in developing the market for junk bonds during the 1970’s and 1980’s, which in turn fueled the 1980’s boom in corporate raids and hostile corporate takeovers. He has been called both a financial innovator and the epitome of 1980’s Wall Street greed.

 

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