Ansoff Matrix - Growth Strategy

Ansoff Matrix

The Ansoff matrix provides four different growth strategies:

Market Penetration:

• This involves increasing market share within existing market segments. This can be achieved by selling more products/services to established customers or by finding new customers within existing markets.

• The risk involved in its marketing strategies is usually the least since the products are already familiar to the consumers and so is the established market.

Product Development:

• Product Development involves developing new products for existing markets. It involves thinking about how new products can meet customer needs more closely and outperform the products of competitors.

• It can also involve the modification of an existing product so that it can appeal more to the already existing market.

• It is slightly riskier, because you're introducing a new product into your existing market.

Example: ITC introduced ready-to-eat gourmet cuisine ‘Kitchens of India’ which specializes in bringing to life age-old Indian dishes from across the country, especially from the gourmet cuisines of Dum Pukht, Bukhara and Dakshin. ITC developed this new product for an existing RTE market.

Market Development:

• This strategy entails finding new markets for existing products. Market research and further segmentation of markets helps to identify new groups of customers.

• This strategy assumes that the existing markets have been fully exploited thus the need to venture into new markets.

• There are various approaches to this strategy, which include: New geographical markets, new distribution channels, new product packaging, and different pricing policies.

Example: ITC's Agri Business Division, has conceived e-Choupal, an initiative by ITC to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture products. This will help develop the market in the rural sector.


• This involves moving new products into new markets at the same time.

• It is the riskiest strategy among the others as it involves two unknowns, new products being created and the business does not know the development problems that may occur in the process. Additionally, you're introducing a new, unproven product into an entirely new market that you may not fully understand.

• There are two types of diversification - Related diversification: This means that the business remains in the same industry in which it is familiar with. - Unrelated diversification: In this, there are usually no previous industry relations or market experiences. One can diversify from a food industry to a mechanical industry for instance.

Example: Coca Cola is using a number of strategies including introduction of new products in existing markets and introducing products in new segments to increase its market share.

Example : ANSOFF matrix of XIAOMI

Ansoff Matrix Xiaomi