Business Plan Tips : Business Planning: Product Market Grid

Probably one of the most useful tools for
business planning is what’s called a product market grid. It’s a fairly simple sort of
a grid, and it develops the idea of whether you’re serving your present market or a future
market you want to develop or you’re serving your present product or a future product that
you want to develop. These are really the most productive growth strategies for the
company. There are really only four ways for a company to grow. The first would be selling
more product to your current market. The second would be developing products that you can
sell to your current market, that you don’t currently sell. The next would be selling
your present product to markets that you haven’t served yet. And the third would be diversifying,
going into new areas and opportunities that present themselves that are consistent with
your core competencies but aren’t current products or markets that you serve. The advantage
here, and when we teach CEOs when we use the product market grid, is the idea that you
should always have a portfolio of strategies. You should always have in your list, when
we teach CEOs about doing strategic planning, one of the keys is we’ll talk about having
a portfolio of strategy ideas and a pipeline where you’re developing strategies, really,
in all of these areas at the same time, deciding which ones you want to execute. It’s important
for a CEO, in developing their business plan, to have a whole portfolio of potential strategies
to choose from- market penetration, product development, market development, and diversification.

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