How to fill in the Ansoff Matrix
Four routes to growth, ordered by how much risk each one carries. This guide walks every block in the recommended order — what belongs there, the questions that unlock it, and patterns from real canvases.
The Ansoff Matrix lays out the only four ways a business can grow, along two axes: existing or new products, existing or new markets. Sell more of what you have to who you already serve, sell new things to existing customers, take existing products to new markets, or do both at once.
Its real contribution is the risk ordering. Each step away from what you already know multiplies uncertainty, and diversification — new product, new market — carries both risks simultaneously. Ansoff's own point was that it is by far the riskiest quadrant and is chosen far more often than the evidence justifies.
Created by Igor Ansoff and published in a 1957 Harvard Business Review article, 'Strategies for Diversification'. It is one of the oldest strategy frameworks still in routine use.
Market Penetration
Existing products, existing markets — how do we sell more?
Lowest risk, because you already understand both the product and the customer. Growth comes from higher usage, higher share, better retention, or better pricing. This quadrant is chronically under-used because it is unglamorous, yet it is almost always the cheapest growth available — a five-point retention improvement usually beats a new market launch and costs a fraction as much.
Ask yourself
- Can existing customers buy more, or more often?
- What would a five-point retention improvement be worth?
- Where are we losing deals to direct competitors?
- Is our pricing leaving money on the table?
Patterns that work
- Cheapest growth per pound spent, and the most reliably ignored
- Retention improvements compound; acquisition does not
- Exhaust this quadrant before funding anything to the right or below
Product Development
New products, existing markets — what else do they need?
Moderate risk: you know the customer, you do not know whether you can build and sell the new thing profitably. This is usually the strongest second option, because your existing relationships give you a distribution advantage and cheap access to research. The failure mode is building something adjacent to your competence rather than adjacent to their need.
Ask yourself
- What else do our customers buy that we could supply?
- Which adjacent problem do they raise repeatedly?
- Can we sell this through the channels we already have?
- Are we building next to their need, or next to our skills?
Patterns that work
- Existing relationships make research cheap and distribution easier
- The adjacent need beats the adjacent capability
- Validate demand with existing customers before building
Market Development
Existing products, new markets — who else needs this?
Moderate risk in the other direction: the product is proven, the customer is not. New markets can mean new geographies, new segments, new industries, or new use cases for the same thing. The usual surprise is that the product needs less adaptation than the go-to-market does — different buyers means different channels, different objections, and different pricing expectations.
Ask yourself
- Which other segment has the same problem?
- Could this work in another geography as-is?
- Is anyone already using our product in an unintended way?
- What would have to change: the product, or the sales motion?
Patterns that work
- Unintended existing uses are the cheapest evidence you will find
- Expect the go-to-market to need more adaptation than the product
- New geography carries regulatory and cultural cost that plans routinely omit
Diversification
New products, new markets — is it worth the risk?
Highest risk, because both variables change at once and you have no existing knowledge to fall back on. Related diversification retains some link to what you already do; unrelated diversification retains none and behaves more like an investment decision than a strategy. Worth pursuing when the core business is genuinely threatened, when you hold a capability that transfers, or when you can afford the loss. State honestly which of those applies.
Ask yourself
- Why can only we do this, rather than anyone with capital?
- What existing capability genuinely transfers?
- Could we afford this failing entirely?
- Would this be better as an acquisition or partnership?
Patterns that work
- Related diversification shares a capability, brand, or channel
- Unrelated diversification is portfolio investment, not strategy
- If nothing transfers, ask why you are better placed than a fund
Ready to fill yours in?
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