Ansoff’s Matrix : Overcoming Paralysis by Analysis

If you’ve ever been overwhelmed by choice, stumped by a necessary business decision, or so unsure of which way to move forward you’ve put the whole project on the proverbial backburner, you’ve likely been struck by paralysis by analysis.   

Top applied mathematician and business manager H. Igor Ansoff used the phrase in his 1965 bestseller ‘Corporate Strategy : An Analytical Approach to Business Policy for Growth and Expansion’. Ansoff posits a logical approach to strategic decision making.

Born in Russia in 1918, Ansoff emigrated to the US aged 19 to study engineering and later received a doctorate in applied math. The preeminent thinker validated his original theories of business strategy with consistent results and has inspired prestigious awards in his name.   

Ansoff didn’t coin the term Paralysis by Analysis, but he was among the first to truly codify the way business strategy operates. His ‘Ansoff Matrix’ proposes a two-by-two framework of tools, tactics, and approaches to move a business forward. These are:   

Market Penetration : The lowest risk strategy of Ansoff’s Matrix focuses on selling existing products and services to existing markets and consumers, increasing market share, and acquiring competition where feasible.

Product Development : This strategy suggests the addition of new products and services aimed at existing customers. This requires extra investment, market insight, R&D innovation, and especially originality – being the first to market matters!

Market Development : Broadening business horizons beyond the usual clientele, expanding into ecommerce, redesign of packaging and diversifying price structures to appeal to a wider base are all part of market development.

Diversification : Introducing new products in new markets in an effort to diversify carries potential risk for a corporation. Diversification may be ‘related’ – with potential overlap with current offerings, or ‘unrelated’ – a brand new direction.

The opposite of paralysis by analysis is referred to as ‘utopia myopia’ when the path chosen is assumed to be the correct one without any evidence to back up the decision. Utopia myopia can be equally as disruptive as paralysis by analysis to the future of a business.

Applying Ansoff’s Matrix may help a team or manager make a decision when the next step is not exactly clear.

As American business magnate Henry Ford once remarked "If everyone is moving forward together, success takes care of itself."