The Ansoff Matrix is a framework that can help you grow your business now and in the future. Jeff Bezos and Amazon has used the Ansoff Matrix to map out their growth strategy. So have companies such as Coca-Cola, Netflix, P&G and others.
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To learn more about the Ansoff Matrix and how Amazon used this framework to grow their business (and how you can use the same framework), watch the video.
Do you want to know how much Jeff Bezos is worth? Check this out, Jeff Bezos is worth $151 billion, that's billion with a B. You want to know how much his company is worth? $863 billion, that's more than Target, Walmart, JC Penny, Best Buy, Macy's and Sears combined. This is one company, and here's the biggest news of all. Guess what? Amazon hasn't paid Federal taxes in two years. That's true.
Now you may be thinking, hey there's something surreptitious going on here? No, they actually just follow the laws and the laws say that if you reinvest your profits into things that build communities then you'll get a tax break and they use those laws to build their business and also the help the communities around them.
Now, I'm here to talk to you today about how you can use some of the techniques Amazon has used to grow their business. This is a framework that we're going to talk about that's going to really blow your mind, you're going to find out how to use that framework in order to think through where your business is going, how it's going to get there and how to make sure that you grow as efficiently and profitably as possible. Let's check it out.
Before we do I want to thank our sponsor for today's episode, AgoraPulse. AgoraPulse is a social media management platform that I use in order to manage and monitor my social media campaigns. I can check out what's working, what's not working, I can schedule a post, I can do a ton of different things that make sure that I'm getting the most bang for my buck with my social media campaigns. Check out Agorapulse.com if you get a chance, they're a fabulous company. I was a fan of theirs and using their product even before they decided to sponsor this episode of IN:60.
So with all that said, let's dive in folks and check out today's episode.
Quadrant number one is market penetration, and that is taking existing markets and growing with existing products.
Quadrant number two is new product development. That's taking existing markets and growing with new products there.
And then quadrant number three is new market development, which is taking new markets and growing with existing products.
And quadrant four is diversification, which is new markets with new products. Diversification is the most risky.
Now I don't know about you, but I learn best by hearing stories about things. A lot of times I hear the theory of things, and then when I hear a story, it makes a little bit more sense to me, so I'm going to do the Ansoff Matrix regarding Amazon, so we can take a look at it.
If you think about Amazon, they started out with existing products for existing marketplaces. That's when they were an online bookstore. They went out and they said, "Let's grow market share." They were the only online bookstore at the time. But then they moved into the new market development category, where they said, "Hey ..." that's a new market with their existing products. That was basically, "Hey, we're doing really well in North America, let's expand globally." That worked for them.
So then they said, "Let's do existing markets with new products." That's when they went in they said, "Hey, we don't have to just sell books anymore, we can start selling razors, we can start selling lawnmowers, we can start selling laundry detergent. We have this distribution network that enables us to do that." So that was that new product development part of the matrix that was really worthwhile for them, using existing markets with new products.
Then finally they got into diversification, which is where they are now with getting into new markets and new products all designed to diversify. That's things like Whole Foods, cloud services, all the new things that Amazon is doing. They are a full force of a company that goes into everything and is knocking it out of the park on everything, and it's why we're talking today about Amazon and not talking about Kmart or Sears or any of the other retailers that were legacy retailers in the 20th Century.
My name is Jamie Turner, I hope that was helpful for you. I know I learn a lot by stories and I learn a lot by matrices like the Ansoff Matrix, it helps me understand how to think about a marketplace and how to analyze it. I'm with the 60 Second Marketer, I hope that was helpful to you, and I'll catch you next time.