New Business Ventures

Strategy Insights

Starting A New Venture is more than business development

Starting up a new business can be incredibly difficult. After all, it takes a lot more than a good concept or idea to enter new markets successfully. Entrepreneurs need funding, mentoring, and a lot of grit to prosper. That is why nine out of ten startups shrivel up and die within three years.

Startups and New Business Ventures have in common that the unknown factors outweigh the known ones. Secondly, since past experience cannot be applied in the new context it requires transformation thinking to increase the chance of success.

It is self-explanatory that relevant past experience is very beneficial when entering into a new business activities. However, it is not sufficient to succeed. In order to increase the chance of success, It requires a more agile approach, a more flexible mindset, and a more entrepreneurial spirit in comparison to mainstream marketing or sales practices in existing markets, distribution channels, or geographical areas.   

In order to increase the chance of success, a number of typical entrepreneurial characteristics should be strongly present, being:

New product or service introductions and/or entering new geographical markets or new market segments are all part of new business development. 

Ansoff’s product/market growth matrix is a useful instrument to identify and understand the basic aspects of new business development.

Market penetration

Market penetration is not being considered as new business development, because the aim of market penetration is to grow sales either by growing the penetration rate and increasing market share. Although it can be tough to further penetrate the market, it is relatively simple in comparison to new product or new market introductions.

Market development

Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:

Market development is a more risky strategy than market penetration because of the targeting of new markets.

Ansoff Growth Matrix

Product development

Product development aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

Being first to market


This is an inherently the most riskful strategy because the business is moving into areas in which it has little or no experience.

For a business to adopt a diversification strategy it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly beneficial to establish growth.