Expansion Strategies: 4 Strategies in Ansoff Matrix To Grow Business

The product market scope refers to the industries the organization confines. When an organization follows the expansion strategy, the marketing or the production function underlies some degree of commonality between the different businesses it operates.

Expansion and growth result from concentrating the resources within the domain of one or more businesses allied in terms of customer needs, functions, or technology.

For example, lowering the price of a combo meal in fast food restaurants to compete with local offers, market development (Malaysia Tourism’s aggressive “Malaysia Truly Asia” campaign to attract tourists), and product development (skincare products in addition to the eye care products by a pharmaceutical company; non­beef, non-pork products by McDonald’s in parts of Asia).

Market penetration, market development, and product development strategies can be followed by an independent business or by a strategic business unit of a multi-business organization.

A strategic business unit is an independent identity capable of conducting business on its own, which is part of a larger multi-business organization.

The option for a particular strategy will depend upon the expected returns, nature, and scope of the industry, whether the industry is in the growth, maturity, or decline phase, and the resource return trade-off.

Market Penetration	Market Development	Product Development
The objective is to increase market share in an existing market. Volume­based strategy.	Product with some variations is marketed to different geographical/demographic markets.	The existing product is in the maturity phase. New/different/ altered products are introduced in the market.
Concentration on the existing market pushes sales aggressively through existing/new segments.	New unsaturated markets exist. The organization has the resources to tap into new markets.	Leveraging the knowledge of customers reduces associated marketing costs.
Higher sales volume enables cost reduction leading to a price reduction and higher market share.	New markets have low entry barriers. Demand is high, and sales are brisk—use of prior knowledge possible.	The market and its dynamics are known; prior knowledge gives a tactical advantage.