Product/Market Grid

Knowledge Center

Summary, forum, best practices, expert tips and information sources.

Ansoff Matrix Product MarketWhat is the Product/Market Grid? Description

The Product/Market Grid of Ansoff is a model that has proven to be very useful in business unit strategy processes to determine business growth opportunities. The Product/Market Grid has two dimensions: products and markets.

Over these 2 dimensions, four growth strategies can be formed.

four growth strategies in the Product/Market Grid

  1. Market Penetration. Sell more of the same products or services in current markets. These strategies normally try to change incidental clients to regular clients, and regular client into heavy clients. Typical systems are volume discounts, bonus cards and Customer Relationship Management. Strategy is often to achieve economies of scale through more efficient manufacturing, more efficient distribution, more purchasing power, overhead sharing.
  2. Market Development. Sell more of the same products or services in new markets. These strategies often try to lure clients away from competitors or introduce existing products in foreign markets or introduce new brand names in a market. New markets can be geographic or functional, such as when we sell the same product for another purpose. Small modifications may be necessary. Beware of cultural differences.
  3. Product Development. Sell new products or services in current markets. These strategies often try to sell other products to (regular) clients. These can be accessories, add-ons, or completely new products. Cross-selling. Often, existing communication channels are used.
  4. Diversification. Sell new products or services in new markets. These strategies are the most risky type of strategies. Often there is a credibility focus in the communication to explain why the company enters new markets with new products. On the other hand diversification strategies also can decrease risk, because a large corporation can spread certain risks if it operates on more than one market. Diversification can be done in four ways:
    • Horizontal diversification. This occurs when the company acquires or develops new products that could appeal to its current customer groups even though those new products may be technologically unrelated to the existing product lines.
    • Vertical diversification. The company moves into the business of its suppliers or into the business of its customers.
    • Concentric diversification. This results in new product lines or services that have technological and/or marketing synergies with existing product lines, even though the products may appeal to a new customer group.
    • Conglomerate diversification. This occurs when there is neither technological nor marketing synergy and this requires reaching new customer groups. Sometimes used by large companies seeking ways to balance a cyclical portfolio with a non-cyclical one.

Although the Product/Market Grid of Ansoff is already decennia old, it remains a valuable model for communication around business unit strategy processes and business growth. The Matrix is also known as: the Ansoff Matrix, the Product Market Expansion Grid, and the Growth Vector Matrix. Derek F. Abell has suggested that a Three Dimensional Business Definition is superior to the Model of Ansoff.

Product/Market Grid Special Interest Group

Special Interest Group (70 members)

Forum about Product/Market Grid  

The most recent topics about: Product/Market Grid.

🔥 NEW Diversification Types and Examples
A business and marketing strategy that has been overlooked by some small businesses is diversification. Due to the Coron (...)
2 reactions
Be Careful with Benefits of Diversification - Misconceptions and Generalizations
WHY DIVERSIFY According to Reel and Luffman (1986) the reason behind diversification lies within the benefits connected (...)
0 reactions
How to Decide in Which Sector to Diversify?
When a firm decides to diversify there could be several possible factors to take into account when making the choice for (...)
0 reactions
How to Prioritize Business Growth Opportunities (Ansoff): The ICE Prioritization Tool
The Ansoff Matrix can be a useful model to generate and communicate business growth opportunities. However, organization (...)
2 reactions
Best Practices about Product/Market Grid

Here you will find the most valuable ideas and practical suggestions.

🥇 Ansoff Matrix Applications
The Products/Markets grid helps in differentiating between game changing & orbit changing moves of an organisation from (...)
2 reactions

🥈 Turbulence, Planning and Paralysis
Igor Ansoff (1918-2002) was (one of) the first to recognize that the amount of strategic 'turbulence' (~pace of change) (...)
0 reactions

🥉 Summary of STRATOP Model
Who can provide a short summary of the STRATOP model? It is supposed to be a model for designing effective product and c (...)
0 reactions

Product/Market Growth Matrix, Product Market Combination (PMC), PMG
The Product/Market Grid or Ansoff Matrix is also called: Product/Market Growth Matrix. The 4 growth strategies are also (...)
0 reactions

Diversification and Globalisation
How can diversification be a tool for globalization? (...)
0 reactions

Strategies for Expanding a Business
A person started a business of extracting metals. Soon it became a popular business. In order to expand his business, he (...)
2 reactions

What is the Optimal Level of Diversification for Firm Performance?
The relationship between diversification and financial performance has been a topic of research for many years but is ye (...)
0 reactions

Ansoff Matrix for Marketing Strategy
The Ansoff matrix clearly describes the marketing strategy and how to launch our product in the market and at what time. (...)
0 reactions

Diversification in Africa: Why African Economies must Diversify
Many African economies have not diversified. Rather they are highly dependent on the production and export of one specif (...)
0 reactions

Expert Tips about Product/Market Grid

Here you will find professional advices by experts.

Typical Risks of a Diversification Strategy

Marketing Strategy (...)

A More Advanced Version of the Ansoff Matrix

Product Development, Product Portfolio Management (...)

How to Find or Redefine Market Boundaries?

Diversification (...)

Diversification Pitfalls

Things to Signal and Avoid when Diversifying (...)

Must-haves of a Portfolio Strategy

Product Portfolio Management, Best Practices, Product Strategy (...)

Pitfalls and Obstacles in Product Development Strategy

Product Development, Product Portfolio Management (...)

Challenging the Existing Strategic Logic

Market Development, Diversification (...)

Typical Risks of a Market Development Strategy

Marketing Strategy (...)

In Which Direction Should we Grow our Portfolio?

Portfolio Strategy, Innovation Strategy (...)

Typical Risks of a Market Penetration Strategy

Marketing Strategy (...)

Determining the Optimal Breadth of your Product Portfolio

Product Portfolio Analysis (...)

The SCAMPER Technique to Creatively Solve Problems and Create Innovative Ideas

Creative Thinking, Lateral Thinking, Idea Generation, Innovation Ideas, Product Innovation, Product Development (...)
Information Sources about Product/Market Grid

Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Ansoff Matrix

Product Portfolio (...)

A Service-Oriented View on Marketing

Service-Dominant Logic, Perspectives on Marketing (...)

Diversification Strategy and Portfolio Management

Diversification, Corporate Strategy, Portfolio Management, Corporate Center (...)

Concept Testing and Conjoint Analysis for New Products

Concept Test, Concept Statement, Conjoint Analysis, Product Design, Product Innovation (...)

Product/Market Grid Diagram

Product Development (...)

Compare with: Three Dimensional Business Definition  |  Blue Ocean Strategy  |  Positioning  |  Relative Value of Growth  |  Porter Competitive Advantage  |  Parenting Advantage  |  Core Competence  |  BCG Matrix  |  Growth Phases  |  Distinctive Capabilities  |  Organizational Configurations  |  3C's

Return to Management Hub: Finance & Investing  |  Marketing  |  Strategy

More Management Methods, Models and Theory

Special Interest Group Leader

Are you an expert in Product/Market Grid? Sign up for free

Link to this knowledge center

Copy this code to your web site:


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2020 12manage - The Executive Fast Track. V15.6 - Last updated: 29-9-2020. All names ™ of their owners.