Page 79 - CL How to Read a Case Study

existing market. Product Development is a medium risk

strategy as the business is familiar with the market but not

the new product.

Market Development

Under a market development strategy a firm sells existing

products to new markets. For example Ty Warner initially

sold his plush toys in contiguous states in the US as demand

grew. Through market development Beanie Babies had the
potential to become a national chain. There are different

ways to define new markets including different locations for

sales to aiming products at different customer groups (age,

background, interests, income).

Summary

Ansoff's matrix enables businesses to decide growth st n to
stick with the markets and products they know (market

penetration) or change one thing the market (market

extension) or the product (product development). For those
prepared to take accept big failure risks for potentially larger

rewards there is diversification into new products and

markets.

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