Interested in growing your business? There are a variety of ways to do so; but how do you know which strategy is right for your venture?A market product grid helps companies plot out their growth strategy and visualize the risks associated with expansion. It can help key leaders make decisions around product development, distribution, marketing, and even hiring. The matrix was initially published by Harvard Business Review and has since become a core teaching at business schools all over the world. Here’s what you need to know about a market product grid, and how to use one to initiate your growth strategy.
WHAT IS A MARKET PRODUCT GRID?A market product grid, also known as an Ansoff Matrix or a product-market expansion grid, is a tool that businesses use to develop a growth strategy by considering new and existing markets, new and existing products, and the risks of each possible relationship. The market product grid divides strategic outcomes by four major categories:
- Market penetration: a business creates growth by bringing its current products to existing markets
- Market development: a business creates growth by bringing its current products to new markets.
- Product development: a business creates growth by bringing new products into existing markets.
- Diversification: a business tries to create growth by bringing new products to new markets.
- Distributing to a new geographical area;
- Implementing new pricing to attract a new customer set;
- Or, developing new distribution channels.