Most businesses don’t fail because they’re doing too little. They fail because they’re doing too much, too soon, in too many directions.
As Michael Porter wisely said, “The essence of strategy is choosing what not to do.”
In the pursuit of growth, it’s easy to get caught up in the temptation to chase every new opportunity—expanding into new markets, launching new products, diversifying at every turn. But without a clear strategy, this kind of ambition can quickly lead to burnout, wasting resources and losing focus.
This is where Igor Ansoff’s brilliance comes in. A mathematician by training and a strategist by nature, Ansoff introduced the world to a simple yet powerful framework: the Ansoff Matrix. It helps business leaders cut through the noise, decide where to grow, and more importantly, figure out where to focus their efforts first.
Let’s take a look at how Ansoff did it—and how you can, too.
The Ansoff Matrix
At its core, the Ansoff Matrix helps businesses assess their options for growth by considering two key dimensions: products and markets. It outlines four distinct strategies:
- Market Penetration
Low risk, high potential
This strategy is all about doing more of what already works. You’re selling your existing products to your existing market but doing it better. Whether it’s through enhanced marketing, improved conversion, or increased repeat purchases, the goal is to extract maximum value from your current offering.
Many businesses overlook this route because it seems too simple or, dare we say, boring. But simplicity often hides power. If you’ve only captured a tiny sliver of your local or niche market, why rush off into uncharted territory?
Ask yourself: Have we truly saturated our current market?
- Product Development
Medium risk, innovation-driven
Here, the aim is to offer new or improved products to your existing customer base. It could involve upgrading your features, introducing complementary services, or bundling offerings in a smarter way.
In short, it’s about listening to your market and delivering more of what they want before they go looking for it elsewhere.
- Market Development
Moderate to high risk, expansion-focused
This involves taking your current products and entering new markets. That could mean targeting a new demographic, launching in a different region, or adding fresh distribution channels such as online platforms or franchising.
The assumption here is that your current market is already fully leveraged. In reality, that’s rarely the case. Before setting sail into new waters, make sure you’ve made the most of the ones you’re already in.
- Diversification
High risk, high stakes
Diversification means launching new products into new markets at the same time. It’s by far the riskiest strategy, as it involves two big unknowns. While it can bring high rewards, it demands careful risk analysis and a very clear return strategy.
There are two types:
- Related diversification – expanding within your industry (e.g., a gym launching its own supplement line).
- Unrelated diversification – venturing into completely new sectors (e.g., Virgin moving from music to airlines and beyond).
This strategy often appeals to entrepreneurs keen to experiment. Just be sure the excitement doesn’t come at the cost of profitability.
So, What’s the Right Strategy?
It depends — but here’s the truth for most businesses:
If you’re not already in the top 100 companies in your sector locally, the most profitable and sustainable path is usually Market Penetration. It’s repeatable, focused, and far less risky. The challenge is that it doesn’t always feel exciting.
As one of my mentors once told me:
“It’s far more profitable to have ten times as many clients within ten miles of your office than one client in every country.”
Before branching out globally, developing a new product, or jumping into a new market take a breath. Step back. Assess just how much opportunity still lies untapped in your current space.
Final Thoughts: Do the Boring Work Brilliantly
Ansoff didn’t just give us a framework – he gave us a mindset. Strategic growth isn’t about doing more, it’s about doing the right things in the right order. The Ansoff Matrix is your compass for navigating those choices with clarity and purpose.
So choose wisely. Excitement can wait. Mastery pays better.
If you’re feeling overwhelmed by options or unsure where your next move should be – you’re not alone. We’ve worked with hundreds of business owners who felt exactly the same before finding clarity.