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Expansion Strategies as per Ansoff

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Sanjit Keskar
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Sanjit Keskar
Professor, India

Expansion Strategies as per Ansoff

I would like your opinions to help me classify the following examples of growth strategies as per Ansoff. Please mention why you choose one of the options and not the others.
Example 1: A toothpaste manufacturer gets into producing and selling dental floss. The technology for both is evidently different. Would this be (in your opinion) a Product Development (as he is still in oral care and product mission is the same), or is this Horizontal Diversification, as he would sell this by leveraging his current customer base, or could it be Concentric Diversification with marketing related synergy. Does this depend on the way he has defined his business as being in the toothpaste business or being in the oral hygiene business?
Example 2: A brand going by the name of Nothing But Chicken (selling chicken related raw and semi prepared products) have now got into selling mutton (seriously!) . Would this be an example of Product Development, Concentric Diversification or Horizontal Diversification? Why?

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  Ger de Waard
1
Ger de Waard
Management Consultant, Netherlands
 

Ansoff Growth Strategies

I think the 1st one could be categorized as more product development : Product development involves creating and offering new products or services to your existing customer base. It allows a company to capitalize on its existing customer relationships and knowledge of the market. Example: A smartphone manufacturer launching a new model with enhanced features to its existing customer base and in your case the Toothpaste manufacturer going into Dental Floss in its existing customer base.

The 2nd one I would categorize as diversification: Diversification is the riskiest strategy and involves introducing new products or services to entirely new markets or customer segments. It may be related (related diversification) or unrelated (unrelated diversification) to the company's existing offerings. Example of related diversification: A sports apparel company entering the athletic footwear market. Example of unrelated diversification: A technology company entering the food industry. As both chicken and mutton (sheep), btw. the company name should also be changed as it is no longer Nothing But Chicken, are related via the denominator MEAT, I think from an Ansoff Matrix perspective it should be related diversification.

 

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More on Product/Market Grid
Summary Discussion Topics
topic Ansoff Matrix Applications
topic Turbulence, Planning and Paralysis by Analysis
topic How to Decide in Which Sector to Diversify?
topic Diversification Types and Examples
topic How to Prioritize Business Growth Opportunities (Ansoff): The ICE Prioritization Tool
topic International/Global Expansion
topic Horizontal Diversification versus Product Development. What's the Difference?
🔥 Innovation Ambition Matrix
👀Expansion Strategies as per Ansoff
topic Diversification in Africa: Why African Economies must Diversify
topic Strategies for Expanding a Business
topic What is the Optimal Level of Diversification for Firm Performance?
Special Interest Group
Knowledge Center

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