What is a growth matrix?

A growth matrix, often exemplified by the Ansoff Matrix, is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future growth. The matrix presents four main strategies: market penetration (selling more of existing products to current markets), product development (introducing new products to existing markets), market development (expanding into new markets with existing products), and diversification (entering new markets with new products). By analyzing the risks associated with each strategy, organizations can manage and plan their growth more effectively. The Ansoff Matrix in particular serves as a foundation for developing plans that range from conservative to aggressive, based on whether or not a firm wishes to venture into familiar territory or new ventures.