The Ansoff Matrix or the product market expansion grid was developed by Igor Ansoff, a Roman-American mathematician, published in the Harvard Business Review in 1975. The Ansoff Matrix explains product or market strategies to help leaders and senior executives make better decisions for growth and future potential.

The Ansoff Matrix has four quadrants or growth strategies that help you decide how your business can expand and grow factoring in the risk involved. The four growth strategies are market penetration, product development, market development and diversification.

The growth strategies in the product market expansion grid are based on four factors that are existing markets, existing products, new markets and new products. 

Let’s understand the example of Ansoff Matrix and the usefulness of Ansoff Matrix to see how you can use it for your business.


  1. What Is The Product Market Expansion Grid?

  2. Example Of Product Market Expansion Grid

  3. How To Excel In Whatever You Do

What Is The Product Market Expansion Grid?


When it comes to growth strategies, assessing whether you should move to a new market or stick to your current market is an important decision. The usefulness of Ansoff Matrix can be determined with the following:

  • Whether you want to expand your business to new and foreign markets
  • Whether you want to maximize your existing customer base with improved products
  • How you want to use your research and development efforts to build a new product for an existing market
  • Whether you want to opt for diversification and move to completely new and uncharted ground with a new product

Each of these four aspects represents what an Ansoff Matrix is all about. Let’s take a closer look at what these four growth strategies, which can be plotted in an Ansoff Growth Matrix example, represent based on the degrees of risk involved.

  1. Market Penetration: This represents businesses that want to stick to the existing market with an existing product and grow based on improved products to increase market share. This is the least risk strategy.
  2. Market Development: Entering a new market with an existing product means you’re expanding into an unfamiliar space, catering to a new market. You need research to understand its needs before you take this leap as the risk is high.
  3. Product Development: If you look at an example of Ansoff Matrix, you’ll find the third strategy is product development. This is when firms build a new product offered in its existing market. The risk here is similar to strategy two.
  4. Diversification: For an entirely new growth strategy for expansion, firms may invest in new products for new markets, which is called diversification. It’s the highest risk option for any business.

An example of Ansoff Matrix will show you how businesses expand and grow their market share based on their needs, market conditions and other risks involved. From a risk analysis and market segmentation to a decision matrix, several strategies come into play before deciding which strategy works. If we were to take an existing product in new market example, you’ll find brands like Apple, Nike or Samsung exploring and establishing themselves globally. The One Plus came as a force and settled in the Indian market. 

Example Of Product Market Expansion Grid


Market expansion means you’re expanding your product offering or market share by offering more than just your normal everyday product. For instance, turning your café into a bar at night is a way to expand your market share. Another example of product market expansion grid is if you start selling your product to industrial sellers and not only to buyers directly.

Whether it’s expansion into a new market with an existing product or developing a new product for an existing product, the product market expansion grid or the Ansoff Matrix helps you determine your options by risk involved. 

How To Excel In Whatever You Do


Harappa’s Practicing Excellence course teaches you how to maximize your opportunities to excel. The point of decision-making is to do something that improves your position, skills and abilities. Not unlike the Ansoff Matrix, you’ll learn how to assess opportunities, threats, strengths and weaknesses. This will give you the foresight to improve on development areas. Understand whether there are roadblocks you need to overcome or other interferences hindering your progress. Just like businesses need to do a SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis, you too need one to be your best self.

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