McKinsey Growth Vector Matrix

The McKinsey Growth Vector Matrix is a strategic tool used to help businesses identify potential growth opportunities. It evaluates growth options based on two dimensions: market penetration and product development. This matrix helps businesses decide whether to focus on existing products and markets or to explore new ones.

At a very high level, the McKinsey Growth Vector Matrix is used in the context of business, strategy, marketing.

McKinsey Growth Vector Matrix quadrant descriptions, including examples
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What is the McKinsey Growth Vector Matrix?

A visual explanation is shown in the image above. The McKinsey Growth Vector Matrix can be described as a matrix with the following quadrants:

  1. Market Penetration: Increasing sales of existing products in existing markets. Example: Boosting marketing efforts for a current product.
  2. Product Development: Creating new products for existing markets. Example: Developing a new version of a popular product.
  3. Market Development: Entering new markets with existing products. Example: Expanding into a new geographic region.
  4. Diversification: Combining new products and new markets. Example: Launching a completely new product line in a new market.

What is the purpose of the McKinsey Growth Vector Matrix?

The McKinsey Growth Vector Matrix is a strategic framework designed to help businesses identify and prioritize growth opportunities. Developed by the consulting firm McKinsey & Company, this matrix evaluates growth options based on two key dimensions: market penetration and product development. By plotting these dimensions on a 2x2 matrix, companies can visualize their strategic choices and make informed decisions about where to allocate resources.

The matrix is divided into four quadrants:

  • Market Penetration: Focuses on increasing sales of existing products in existing markets. This strategy often involves marketing efforts, pricing strategies, and improving product features.
  • Product Development: Involves creating new products to serve existing markets. This can include innovation, research and development, and expanding product lines.
  • Market Development: Entails entering new markets with existing products. This could involve geographic expansion, targeting new customer segments, or exploring different distribution channels.
  • Diversification: Combines new products and new markets. This is the most risky strategy but can offer significant growth potential if executed well.

Use cases for the McKinsey Growth Vector Matrix include strategic planning sessions, market analysis, and product portfolio management. By using this matrix, businesses can systematically evaluate their growth options and develop a balanced growth strategy that aligns with their overall business objectives.


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What templates are related to McKinsey Growth Vector Matrix?

The following templates can also be categorized as business, strategy, marketing and are therefore related to McKinsey Growth Vector Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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