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CS Professional · Strategic Management and Corporate Finance · Strategic Analysis and Planning

A cement manufacturer in Rajasthan sells only in north India. Without changing its product, it now starts selling through new dealers in Gujarat and Maharashtra. Under the Ansoff product-market matrix, this is best described as:

This is market development. In Ansoff's matrix, selling an existing product in new markets, here new states, is market development, whereas penetration stays in current markets, product development changes the product, and diversification changes both product and market.

  1. AMarket penetration
  2. BMarket developmentCorrect
  3. CProduct development
  4. DDiversification

Explanation

The product stays the same (existing product) while new geographic markets are entered, which is market development in Ansoff's matrix. Market penetration would mean selling more of the same product in existing markets. Product development needs new products, and diversification needs both new products and new markets.

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