The thing about the Ansoff matrix is the boxes are clearly defined, but sometimes it’s tricky working out whether a company is developing the market, the product, or both.
Take Lego. One of its constant struggles is to get girls to buy more lego. Lego is intrinsically more about construction and pursuits typically considered more “male”. So by introducing girly things like jewellery kits or room mobiles, a “tweak” on the lego concept, according to the Ansoff theory this is an example of Lego filling a gap – extending to a new consumer group, ie market development. The product field is still similar.
If they then go and introduce clothing, this is a totally new type of market, totally different types of products, the customers are perhaps the same (kids), but the competition, distribution and many other aspects of the 4Ps are different. So this then becomes product development.
The biggest implications for Lego come with the product development strategy. Just like building Lego parks (same customers, new products), or launching Lego gaming software (also same customers, new products), it means taking on new knowledge and skills. A bigger step in the Ansoff matrix – one step short of diversification.
Strangely though, according to my sources, neither lego clothing nor girl’s lego are rocking the market from its foundations. Which is slow child development in anybody’s books. And confirmation of what often happens with product growth through the Ansoff matrix – the biggest source of business tends to come from the original product concept. Extensions are merely an add-on.