In the Ansoff Matrix, which growth strategy focuses on new products in new markets?

In the Ansoff Matrix, which growth strategy focuses on new products in new markets?

• A. Market Penetration
• B. Product Development
• C. Diversification
• D. Market Development

Answer: (C)

Diversification is the growth path that combines a new product with a new market. In the Ansoff Matrix, market penetration stays with existing products in existing markets, product development pairs new products with existing markets, and market development uses existing products in new markets. Diversification takes both steps at once, entering with a product that’s new to the company and selling it in a market where the company hasn’t operated before. This is why it’s the fit for new products in new markets, though it also brings the highest level of risk and the need for new capabilities, research, and distribution. For example, a clothing brand launching a line of smart home devices and selling them in a country where it has no prior presence illustrates diversification.

Diversification is the growth path that combines a new product with a new market. In the Ansoff Matrix, market penetration stays with existing products in existing markets, product development pairs new products with existing markets, and market development uses existing products in new markets. Diversification takes both steps at once, entering with a product that’s new to the company and selling it in a market where the company hasn’t operated before. This is why it’s the fit for new products in new markets, though it also brings the highest level of risk and the need for new capabilities, research, and distribution. For example, a clothing brand launching a line of smart home devices and selling them in a country where it has no prior presence illustrates diversification.