Ansoff matrix: what it is and what to do instead

The idea worth keeping

Not as boxes to fill, but as questions that fall out of the maths of the goal:

• How big is the gap between where we are heading and the target?
• How much could we add by selling more of what we sell to people we already serve?
• What would new products for existing customers, or new markets for existing products, add?
• Which options fill the gap with the least risk?

Why reaching for it fails in an interview

• It is generic. Four boxes of growth routes fit any company with growth ambitions.
• It misses the driver that matters. The boxes do not say how big the gap is, so you cannot tell whether one option is enough or you need three.
• It sounds rehearsed. Naming all four quadrants sounds like a list from a course, not a plan.

What to do instead: a worked case

1. 1

   Pin the question

   Find 50 million of extra revenue within four years, ranked by value and risk.

2. 2

   Write the maths of the goal

   • Revenue = learners x average revenue per learner
   • Today: 200,000 learners x 500 = 100 million; gap to target = 50 million
3. 3

   Use what you know about the business

   • In education, winning a new learner costs a lot in marketing, while selling more to an existing learner who trusts you is cheap.
   • Demand follows the exam calendar, so growth in one exam is capped by how many people sit it.
   • Courses for a new country need local exam content and teachers, which takes time and money.

   The structure that falls out of it

   • More from existing learners
     • Share who would buy one-to-one tutoring
     • Tutoring price
   • More learners for the same exam
     • Exam takers we do not reach
     • Share we could win
   • Same courses in a new country
     • Exam takers there
     • Price they can pay

   Hypothesis: Tutoring for existing learners is the cheapest and surest money; I expect it plus a bigger share at home to cover most of the gap.

4. 4

   Find the facts that decide it

   • Tutoring: 20% of 200,000 learners = 40,000, at 600 each = 24 million.
   • More share at home: 40,000 more learners at 500 = 20 million.
   • A new country: 30,000 learners at 400 = 12 million. All three together: 24 + 20 + 12 = 56 million, above the 50 million gap.
5. 5

   Say so what

   Fill the 50 million gap mainly from the business the company already knows: tutoring for existing learners (24 million) and more learners at home (20 million), then launch in one new country (12 million) to cover any shortfall. Corporate training, a true diversification, is not needed to hit the target. The risk is tutor supply, so start recruiting tutors now.

Build the acumen behind it

The worked case used two things a list cannot give you: the five moves, and knowing how this kind of business makes money. These pages teach both.