Product & Market Expansion

ANSOFF MATRIX 

The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used by firms to analyse and plan their strategies for growth. The matrix was developed by applied mathematician and business manager H. Igor Ansoff and was published in the Harvard Business Review in 1957. The Ansoff Matrix’s helped many marketers and leaders understand the risks of growing their business.

PRODUCT DIVERSIFICATION

Product Diversification is a strategy employed by a company to increase profitability and achieve higher sales volume from new products. Diversification can occur at the business level – Expanding into a new segment of an industry that the company is already operating in; or at the corporate level – Expanding into a new industry that is beyond the scope of the company’s current business unit. Examples of this include: 

  • General Electric operating in Aviation, energy connections, healthcare, lighting, oil and gas, power, renewable energy and transportation.

  • Walt Disney Company operating in theme parks, cruise lines, resorts, TV broadcasting and live entertainment.

BEACHHEAD STRATEGY

The beachhead strategy comes from the military strategy of winning a small border area that becomes a stronghold, and from which they advance to the rest of the territory. The small border area is referred to as a beachhead. In business, the idea is to focus your resources on a small market area (such as a product category or smaller market segment) to turn it into a stronghold before advancing to the broader market or product categories. The beachhead strategy allows them to dominate the small areas from which they can enter and dominate the rest of the market. Some key factors to consider when evaluating this options are:

  • A business should go into a market where the potential customers are already purchasing a similar product, which the business intends to offer.

  • The customers within the potential market should have similar sales cycles.

  • A market where customers frequently spread information or ideas by word of mouth.

  • A business should have a focused segmentation for the beachhead market to allow it to refine its propositions.

NEW TARGET MARKET

A business can be entirely reshaped if it develops, markets, and sells new products in a new target market (the market of individuals that are most likely to want, need, and buy the products). 

GROWTH STRATEGIESFrancesca Tabor