​​Growing a business is an exciting prospect for many entrepreneurs, yet doing so requires enough research and preparation to execute the growth without letting it get out of hand, read more about customer experience management.

Business growth strategies can help entrepreneurs identify actionable, direct ways to do so. They pinpoint your overarching goals with which you’ll build your course of action and provide insight into how you’re looking to approach your new product or market. This can be especially helpful for global growth, which requires careful planning to execute.

Entrepreneurs looking to go global may use a growth strategy defined by the Ansoff Growth Matrix.

What Is the Ansoff Growth Matrix?

The Ansoff Matrix is a business growth strategy model that can guide entrepreneurs to the type of growth they’re looking for. The matrix defines business growth by various pairings of new products vs. new markets, encapsulating the many different ways entrepreneurs can build.

Nailing down which type of growth you’re aiming for can help you decide how to evolve your business as you go global. The types of growth strategies defined by the Ansoff Matrix are the following:

Market Penetration

To put it simply, market penetration is entering an existing market with a similar product to those already being offered. The goal with a market penetration strategy is to enter an already thriving market and siphon some of the customer base away from those already competing in the space.

Step to Success: Adjust pricing to compete with a major player in your market.

Market Development

Market development (also known as market expansion) involves taking your existing product and expanding it into new markets to attract a new customer base. In contrast to market penetration, market development involves a little more creativity because it forces the business owner to think of alternate ways their product could be used and additional demographics who could benefit from it.

Step to Success: Conduct thorough market research to determine whether your new target will be a good fit.

Diversification

A diversification strategy could appeal to business leaders who don’t mind a little risk. This strategy involves developing new product lines for new markets, diversifying your portfolio while trying to bring in new customers. Companies usually diversify to make more money in markets that they previously weren’t hitting.

Step to Success: Pay attention to what markets are experiencing rapid growth to identify ways you can enter.

Product Development

In a product development strategy, a business stays within their current market but creates a new product or modifies an existing one to attract new customers and increase their share of the market. While this cuts out the risk of entering a new market altogether, product development is still a riskier growth strategy that will involve careful planning because it involves the creation of something new.