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Business Growth Opportunities

How Do You Evaluate Business Growth Opportunities?

It is useful to have a means of grouping and assessing the growth opportunities that are available for your business. There are four overarching business growth strategies to consider, as shown in the Anshoff matrix diagram [1].

The matrix considers existing products and new products as well as existing markets and new markets. The most straightforward growth strategy is to sell more of the products and services you already have into the markets you already know – market penetration. With this approach you don’t need to do or get to know anything new.

Anshoff-matrix-diagramThis business growth strategy is dependent on the level of market share you currently have. If your current market share is very high, further market penetration will be difficult; if it is low to moderate (as is the case with most B2B SME markets) then increasing your market penetration is the strategy of least resistance and likely to produce the fastest business growth results.

The next options to consider are either introducing existing products into new markets (market development) or new products into existing markets (product development). In both cases, one of the two dimensions is known and understood which limits the amount of change required for success. The choice of strategy will normally depend on whether the company is better at product development or marketing.

The most difficult challenge is where everything is new – diversification with new products being introduced into new markets. This requires expertise in both product development and market development.

The matrix allows you to group your potential growth opportunities for comparison and evaluation. You can identify which quadrant of the matrix sits best with your strengths and then compare and assess business growth strategies within the quadrant.

Before looking at where the growth opportunities are, it is important to consider the quantum of the growth that you are looking for. The more aggressive your growth target, the more likely you will need to look for new products or new markets or both in order to achieve it.

[1] First presented by Igor Anshoff in his book Corporate Strategy – McGraw Hill 1965.