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Product/Market grid Ansoff is a model which is used to determine the growth opportunities for business and is very much useful in the business-unit strategy. The two dimensions described by this model are: products and markets. With the help of these two dimensions there are four growth strategies:

1. Market development

2. Product development

3. Market penetration

4. Diversification

1. Market development: In this we present the already existing products to a new audience. Examples of market development are moving on to a new region, exporting products etc. Companies try to move the clients far from rivals.

1. Product development: This strategy is just opposite to the market development strategy. Here the customers remain the same and new products are launched to those customers. Auto markets are best example of product development since here the buyers remains the same where as the existing auto models are updated.

1. Market penetration: Here the product as well as the customers both remains unaltered. Here the existing products are presented to the existing audience by promoting the product, brand repositioning etc. Some of the objectives of market penetration are:

a. Maintains the current product’s market share

b. Dominating nature of growth markets is secured

c. Market is reformed by removing the competitors

1. Diversification: Here new products are launched to new customers’ i.e. both the market and product is altered. Two types of diversification are:

a. Related

b. Unrelated

In related diversification sellers remain in the market or industry which is familiar whereas in unrelated diversification market or industry is unfamiliar.

Again the diversification can be divided into three categories

1. Horizontal diversification: It is production program’s extension.
2. Vertical diversification: It is stored by products pre order
3. Lateral diversification: It is related to the sale of completely new product

Written by: Matt

We also suggest this relevant article if you have time: Management by Objectives by Peter Drucker

Some other similar articles

• Ansoff product/market grid
• GE/McKinsey Matrix
• Growth Share Matrix BCG
• The BCG Matrix
• Fair Value Accounting

Tagged as ansoff, audience, auto models, brand repositioning, business unit strategy, existing products, growth markets, growth opportunities, growth strategies, horizontal diversification, market development strategy, market penetration, market share, related diversification, rivals, s market, types of diversification, unrelated diversification + Categorized as Economy articles, Marketing & PR