Companies should always be looking to the future. One useful device for identifying growth opportunities for the future is the product/market expansion grid. The product/ market growth matrix (proposed by Igor Ansoff) is a portfolio-planning tool for identifying company growth opportunities through:
* Market Penetration-making more sales to present customers without changing products in any way. Supporting tactics might include greater spending on advertising or personal selling.
* Market Development-a strategy for company growth by identifying and developing new markets for current company products.
* Product Development-a strategy for company growth by offering modified or new products to current markets.
* Diversification-a strategy for company growth by starting up or acquiring businesses outside the company's current products and markets. This strategy is risky because it does not rely on either the company's successful product or its position in established markets.
As market conditions change over time, a company may shift product-market growth strategies. For example, when its present market is fully saturated, a company may have no choice other than to pursue new markets.