How to expand and grow your business in a structured fashion

by GuestPoster on August 8, 2011

Sometimes, when trying to think of ideas as to how to improve and grow a business the apparent choice of ideas can seem overwhelming.  However, there are really only four options open to us and they are:

Develop a new service or product;
Expand the market area;
Diversify our offering, and
Increasing penetration into the existing market.

The four areas were developed by Igor Ansoff, a business teacher, and they are a really useful way of helping to guide and arrange our thoughts.  He used a matrix to explain his idea, as shown here:

Let’s use a practical example to see how we could use Ansoff’s matrix to help up garner our thoughts.  For the example we have a business providing office cleaning services in our local town.

Market penetration

The same service to the same market.  Assuming that we don’t clean every office in town we basically just go out there and market to more and more offices. We improve our advertising and we think of quirky or different ways to get ourselves notices, such as sponsoring a local event.

Product development

This is selling new products to our existing customers.  So, if our cleaning consists of general cleaning of floors and rubbish removal we might expand into upholstery care and cleaning or window washing.

Market development

Offering our present service to new markets.  Why are we only cleaning offices?  What about schools?  Military or government buildings?  If the idea of franchising your business is of interest how about selling a franchise to someone in a local town and expanding into that market?

Diversification

This is probably as far out of your comfort zone as you can go!  Doing this can seem like starting a new business sometimes.  How about we offer our cleaning services for graffiti clean up?  Still cleaning but a whole new market area using skills and equipment that are very different to our present offering.

Risk

You’ll have noticed by now that different options carry different levels of risk (and cost) to your business.  Some ideas can be quite low risk and cost but others are at the other end of the scale.  That’s not to say you shouldn’t do them but do be sure that you have done your research properly.

Running a successful business requires you to keep expanding and trying new ideas.  Using the Ansoff matrix is a good way of adding structure to your thought processes and ideas and might help to stop you from  getting too carried away with some (too) wild ideas.

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