The Ansoff Matrix includes four growth strategies. Which are they?

• A. Market Expansion, Product Enhancement, Geographic Diversification, Retrenchment
• B. Acquisition, Merger, Alliance, Divestment
• C. Cost Reduction, Process Improvement, Outsourcing, Automation
• D. Market Penetration, Product Development, Market Development, and Diversification

Answer: (D)

This question tests your understanding of the growth options defined in the Ansoff Matrix. The four strategies are Market Penetration, Product Development, Market Development, and Diversification. Market Penetration aims to grow share in an existing market with an existing product, using tactics like price changes, promotions, or broader distribution—low risk because you stay in familiar territory. Product Development involves bringing a new or improved product to your current customers, leveraging knowledge of their needs. Market Development uses your existing product to enter new markets, such as different geographic areas or new customer segments. Diversification combines new products with new markets, carrying the highest risk but offering the potential for substantial growth if well aligned with capabilities. The other options describe actions not part of these four growth paths, which is why this set is the correct answer.