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Intensive Growth Strategies: Ansoff’s Product-Market Expansion Grid

The Ansoff’s model is one of the best tool which companies to develop market and product expansion strategies.Ansoff’s  model is based upon four type of strategies namely market penetration strategy, market development strategy, product development strategy and diversification strategy. The strategy is also dependent on company objectives include increasing sales, increasing profit, enter into new market, develop new product and enter into new business.

Ansoff’s Product-Market Expansion Grid

img006 thumb Intensive Growth Strategies: Ansoffs Product Market Expansion Grid

 Now we’ll discuss the four intensive growth strategies in detail.

Market penetration strategy

The first strategy company is looking to adapt for increasing there sales and profits. Marketing efforts of the company to offer their existing products in the current markets is called market penetration strategy. The best way to do this to attract competitors customer and looking for potential customer for the existing products.

Market Penetration Figure

605rad15 fig1 thumb Intensive Growth Strategies: Ansoffs Product Market Expansion Grid

The penetration that brands and products have can be recorded by companies such as ACNielsen and TNS who offer panel measurement services to calculate this and other consumer measures. In these cases penetration is given as a percentage of a country’s households who have bought that particular brand or product at least once within a defined period of time.

Examples of Market penetration strategy

Recognizing that software as a service can be a potent market penetration tool, Dell is assembling a services portfolio that now includes e-mail disaster recovery, spam/virus filtering and archiving via its MessageOne acquisition.

Southwest airline in the current market by offering flights for the small distance cities.

According to Peter Wilson of High Definition & Digital Cinema Ltd., in terms of market penetration HD televisions were present in only 17
percent of U.S. households last year, a number that will grow to 22 percent this year and will exceed 55 percent in 2008.

Pakistan State Oil penetrate in Pakistan market from 40% to 65% in the duration of 4 years by developing new retail outlets.

Market development Strategy

Developing a new market for the existing company product is called market development strategy.This is the process of finding new market for the new customer to increase company performance by increasing sales and profits. Companies can develop market on geographical such as city,country,region,state etc and demographical such as age,sex,gender,class etc.

Market Development Figure

market expan thumb Intensive Growth Strategies: Ansoffs Product Market Expansion Grid

A marketing manager has to think about the following questions before implementing a market development strategy: Is it profitable? Will it require the introduction of new or modified products? Is the customer and channel well enough researched and understood? The marketing manager uses these four groups to give more focus to the market segment decision: existing customers, competitor customers, non-buying in current segments, new segments.

Market development strategy examples

Pakistan State Oil(PSO) developing new market by exporting oil to Afghanistan.

Chinese products developed new market for their product worldwide.

Product Development Strategy

Developing or modifying new products and offering to the existing market is called product development strategy. This strategy takes time and money for developing a new product. Marketing Manager must conduct a detailed survey whether it is feasible to introduce new product in the current market.

Product Development Figure

product development funnel copy gn07 thumb Intensive Growth Strategies: Ansoffs Product Market Expansion Grid

Product development strategy examples

Google developed a new browser Chrome for the existing Internet user.

McDonalds is always within the fast-food industry, but frequently markets new burgers.

Diversification Strategy

Diversification Strategy is the development of new products in the new market. Diversification strategy is adopted by the company if the current market is saturated due to which revenues and profits are lower. At the corporate level, it is generally and its also very interesting entering a promising business outside of the scope of the existing business unit.

Diversification Strategy Figure

Ansoff diversification thumb Intensive Growth Strategies: Ansoffs Product Market Expansion Grid

Diversification strategy examples

Virgin Media moved from music producing to travels and mobile phones

Walt Disney moved from producing animated movies to theme parks and vacation properties

Canon diversified from a camera-making company into producing whole new range of office equipment.

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6 Responses to "Intensive Growth Strategies: Ansoff’s Product-Market Expansion Grid"

  1. IRA Savings says:

    You mention truth point on that stuff. For me you described it in a professional way. Hope you will go further this way, with your brilliant ability of posting

  2. saba says:

    An amazing, complete, relevant information. I’m rightnow preparing for my exam.

  3. Amit Jain says:

    Thanks for the interesting article on Ansoff’s Product-Market Expansion Grid. I would rate this article 10 on 10 because of simple language, appropriate examples and beautiful presentation.

  4. duke says:

    I did not understand the model when taught in class but now i understand God bless u.

  5. Regine says:

    Thx for the helpful article. I’m in Rwanda & preparing for my exam. This grid was so difficult for me to understand but now i understand.

  6. Farhan says:

    Thanx for wonderfull explaination about matrix of ansoff’s model..

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