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Ansoff's Product-Market Expansion Grid

Ian Ansoff has proposed a useful framework called the product/market expansion grid for detecting new intensive growth opportunities. There are four strategies, one for each of the quadrants:

Market Penetration Strategy
When the product is in the current market, it can still grow. There are three major approaches to increasing current product's market share:
1. Encourage current customers to buy more.
2. Attract competitor’s customers.
3. Convince non-users to use the product.

Market-Development Strategy
When the current product is launched in a new market, there are three approaches to develop the market:
1. Expand distribution channels.
2. Sell in new locations.
3. Identify the potential users.

Product-Development Strategy
When a new product is launched in the current market, the intensive growth strategies could be to:
1. Develop new features.
2. Develop different quality levels.
3. Improve the technology.

Diversification
When a new product is launched in a new market, diversification makes good sense as better opportunities are found outside the present business. The diversification strategies are of three types:
1. Concentric Diversification Strategy: Develop new products with the earlier technology for new segments
2. Conglomerate Diversification Strategy: Develop new products for new markets.
3. Horizontal Diversification Strategy: Develop new products with new technology for old customers.

  OLD PRODUCTS NEW PRODUCTS
  OLD MARKETS Market Penetration Product Development
NEW MARKETS Market Development  Diversification

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