CA Intermediate · Financial Management and Strategic Management · Strategic Choices
A Pune-based packaged snacks company, which sells only in Maharashtra, decides to start selling its existing products in Gujarat and Karnataka without changing the products. Under Ansoff's product-market matrix, which growth strategy is this?
This is market development. Ansoff's matrix classifies a strategy of selling existing products in new markets as market development. The snacks are unchanged, but Gujarat and Karnataka are new markets for the firm, so it is not penetration, product development or diversification.
- AMarket penetration
- BMarket developmentCorrect
- CProduct development
- DDiversification
Explanation
The firm is taking existing products to new markets (new states), which is market development in Ansoff's matrix. Market penetration would mean selling more of the same product in the same market. Product development needs new products, and diversification needs both new products and new markets.
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