ITPEC FE Morning October 2022 Question 66
In a growth matrix proposed by Ansoff, which of the following is a strategy for expanding a business with an existing product in an existing market?
Explanation
Market penetration — growing by selling more of an existing product in the market it already serves.
Ansoff's growth matrix crosses product (existing or new) with market (existing or new):
An existing product in an existing market is the top-left cell: the company grows by raising its share and its customers' usage, through promotion, pricing or winning competitors' customers.
Answer (c)
Why not others:
- •(a) Diversification — a new product in a new market, the riskiest cell
- •(b) Market development — an existing product taken to a new market, such as a new region or customer segment
- •(d) Product development — a new product for the existing market
Key rule: Ask what is new: nothing is market penetration, the market is market development, the product is product development, both is diversification.
Business Strategy Management · AI-written, may contain errors
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