Ansoff Matrix: Strategic Tagging for Growth Risk, Not Prioritisation

This is one of RoadmapOne ’s articles on Objective Prioritisation frameworks .

Igor Ansoff published his growth matrix in 1957, and it’s been a strategy staple ever since. The 2×2 grid maps Existing/New Products against Existing/New Markets, producing four growth strategies with ascending risk profiles.

Product teams often reach for Ansoff when planning roadmaps. Here’s what they discover: Ansoff is categorisation, not prioritisation. It tells you what type of growth you’re pursuing—it doesn’t tell you which specific initiative to fund first.

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The Four Quadrants

Market Penetration: Lowest Risk

Sell more of what you already have to customers you already serve. You know the product, you know the market, you’re optimising execution rather than exploring uncertainty.

Examples:

• Increasing conversion rates in your existing funnel
• Reducing churn among current customers
• Upselling existing customers to higher tiers
• Improving activation for users who already signed up

This is Run and Grow work in RGT terms —deepening your position in known territory.

Market Development: Medium Risk

Take existing products to new markets—new geographies, new customer segments, new use cases. You know the product, but you’re learning about new customers.

Examples:

• Expanding from UK to European markets
• Moving from SMB to Enterprise customers
• Repositioning a B2C product for B2B use cases
• Localising for new language markets

The risk is higher than penetration because you’re testing whether your existing product resonates with customers who have different needs, buying processes, or competitive alternatives.

Product Development: Medium Risk

Build new products for existing markets. You know the customers, but you’re creating something new.

Examples:

• Adding a mobile app for your existing web users
• Building an analytics product for customers who use your core platform
• Creating a premium tier with new capabilities
• Developing an API for customers who want integrations

The risk comes from product uncertainty—will customers actually want this new thing? You’re leveraging customer relationships and market understanding, but the product is unproven.

Diversification: Highest Risk

New products for new markets. You know neither the product nor the customer. This is pure exploration.

Examples:

• A B2B SaaS company launching a consumer product
• A UK-focused company building for Asian markets with a new product
• Entering an adjacent industry with no existing footprint
• Acquisitions in unfamiliar markets

Diversification is Transform territory—high uncertainty, high potential reward, and the highest risk of failure.

Tag your roadmap by Ansoff quadrant in RoadmapOne

Ansoff as a Tagging Framework

Ansoff doesn’t tell you which initiative to build first. It tells you what type of growth each initiative represents.

This makes it a tagging framework, similar to Run/Grow/Transform . You tag objectives by Ansoff quadrant, then use the portfolio breakdown to check strategic balance:

“We’re spending 70% on Market Penetration and 5% on Diversification—is that the risk profile we want?”

That question is valuable. A portfolio that’s 100% Market Penetration is optimising today at the expense of tomorrow. A portfolio that’s 60% Diversification is taking on risk that might not be appropriate for your stage.

In RoadmapOne, you can tag objectives by Ansoff quadrant and instantly visualise the breakdown. When the board asks “How much are we investing in growth versus new bets?"—you have a quantified answer.

The Risk Conversation

The quadrants have implicit risk ordering:

1. Market Penetration — Lowest risk (known product, known market)
2. Market Development — Medium risk (known product, new market)
3. Product Development — Medium risk (new product, known market)
4. Diversification — Highest risk (new product, new market)

When leadership pushes for aggressive Diversification plays, Ansoff gives you vocabulary to discuss whether you’re taking on appropriate risk. “That’s a Diversification bet—new product, new market. We’re currently at 5% Diversification capacity. Are we prepared to increase that to 20%?”

The framework doesn’t make the decision. It structures the conversation about risk appetite.

Common Misuses

Mislabelling Penetration as Product Development

The misuse I see most often is teams labelling everything as “Product Development” when it’s actually Market Penetration.

Building a new feature for your existing customers in your existing market isn’t Product Development—it’s Penetration. You’re deepening your position, not creating something fundamentally new.

The distinction matters because Product Development and Diversification require different investment profiles:

• Longer time horizons — new products need discovery and iteration
• Higher risk tolerance — most new products fail
• Different team capabilities — exploration versus optimisation

If you’re mislabelling Penetration work as Product Development, you’re overstating how much genuine innovation is in your portfolio. The board thinks you’re building for the future; you’re actually just optimising the present.

Using Ansoff for Prioritisation

Ansoff tells you which quadrant an initiative falls into. It doesn’t tell you whether to fund it.

A Market Penetration initiative might be lower priority than a Diversification initiative if the Diversification bet has dramatically higher potential value. The quadrant describes risk profile, not priority.

Use Ansoff for portfolio balance. Use RICE , BRICE , or another framework for actual prioritisation within and across quadrants.

Ansoff + RGT: Complementary Lenses

Ansoff and Run/Grow/Transform answer related but different questions:

You can use both. An objective might be tagged:

• RGT: Grow (expanding the core business)
• Ansoff: Market Development (taking existing product to new geography)

The combination provides richer strategic context than either alone.

Example: Mapping a Portfolio

Now you can slice the portfolio multiple ways:

• “We’re 60% Run/Grow, 40% Transform” (RGT view)
• “We’re 70% Penetration, 20% Development, 10% Diversification” (Ansoff view)

Both views inform strategic conversations without conflicting.

Tag by multiple frameworks in RoadmapOne for richer portfolio analysis

When Ansoff Clarifies Direction

A client was debating whether to expand into a new geography (Market Development) or build a new product line for existing customers (Product Development). Both felt like “growth.” Both had compelling business cases.

Plotting them on Ansoff made the risk profiles visible:

• Market Development leveraged their existing product strength—they knew the product worked, they just needed to learn new customer segments
• Product Development required building new capabilities—they knew the customers, but the product was unproven

Given their stage—post-Series B, needing predictable growth for the next funding round—Market Development was the lower-risk path to the growth targets the board wanted.

Ansoff didn’t make the decision. But it structured the conversation by making the risk profiles explicit.

Practical Implementation

If you’re adopting Ansoff tagging:

Define what “new” means for your context. Is a new customer segment a “new market” or an extension of your existing market? Is a major feature addition a “new product” or an enhancement? Set definitions before you start tagging.

Tag at the objective level. Each objective gets one Ansoff quadrant. If an objective spans quadrants, it’s probably too big—break it down.

Review the portfolio breakdown quarterly. What percentage of capacity goes to each quadrant? Does that match leadership’s risk appetite?

Pair with prioritisation frameworks. Ansoff tells you the growth type; RICE/BRICE tells you the priority. Tag first, then score.

Use for stakeholder conversations. When leadership pushes for more innovation, show them the Ansoff breakdown. “We’re currently 5% Diversification. You’re asking for initiatives that would take us to 25%. Let’s discuss whether that’s the right risk profile.”

The Bottom Line

Ansoff Matrix is strategic categorisation, not prioritisation. It describes what type of growth you’re pursuing—Market Penetration, Market Development, Product Development, or Diversification—with ascending risk profiles.

Use it as a tagging framework in RoadmapOne. Tag your objectives by Ansoff quadrant, visualise the breakdown, and use that view to spark conversations about risk appetite and portfolio balance.

But don’t mistake the tag for a priority. Knowing that an objective is “Market Development” doesn’t tell you whether to fund it before or after a “Product Development” initiative. For that, you need quantitative frameworks like RICE or BRICE .

Ansoff answers “what type of growth?” RoadmapOne helps you answer “how much of each type?"—and then prioritise within and across categories.

Get started with RoadmapOne (free) and visualise your growth risk profile

References

• Igor Ansoff, Corporate Strategy (1965) — Original source of the matrix
• Run/Grow/Transform — Complementary strategic tagging framework
• RICE Prioritisation — Quantitative prioritisation within quadrants
• BRICE Prioritisation — RICE with strategic alignment
• Objective Prioritisation Frameworks — Complete guide to all frameworks