Business Strategy & Growth
⏱ ~3-min readAceMark Guide
What this topic is really about
Ansoff's matrix identifies Market Development as launching an existing product into a new geographic market.. Market development means taking an existing product into a new market, such as a new region or customer segment.
A merger involves two firms of similar size combining to form a single new company.. A merger is the agreed combination of two firms, typically of comparable size, into a single new business.
See the mechanism
This is because Market Development involves taking an existing product to a new market, making it a strategic move to increase market share without changing the product. A diagram for this topic isn't available yet — the worked example below walks the same reasoning step by step.
An exam-style question, fully explained
Ansoff's matrix suggests that launching an existing product into a new geographic market is an example of which strategy?
- Identify what the question tests: Ansoff's matrix suggests that launching an existing product into a new geographic market is an example of which strategy.
- Market development means taking an existing product into a new market, such as a new region or customer segment.
- This differs from creating new products for existing customers, and from entering wholly new markets with new products, which is the riskiest quadrant.
- Why it matters: This is because Market Development involves taking an existing product to a new market, making it a strategic move to increase market share without changing the product.
Traps the examiner sets
- Many students confuse Market Development with Diversification, which involves creating new products in new markets, whereas Market Development involves the same product in a new market.
- Some students may mistakenly classify a government subsidy as a strength, thinking that it is an internal attribute of the business. However, since it is an external factor, it is more accurately classified as an opportunity.
- Many students confuse mergers with takeovers, where one firm buys control of another. Mergers require the agreement of both parties and result in a new, combined entity.
Test your recall
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