When a company offers new product in existing market, the strategy is known as:

Question

Accepted Answer

The correct option is 1:
Product Development is one of the four core growth strategies defined in Igor Ansoff's Product-Market Growth Matrix. This strategy specifically involves a company developing a new product or significantly modifying an existing one to offer to its current, established market. The primary objective is to drive growth by leveraging the company's deep understanding of its existing customers and their needs, while simultaneously innovating the value proposition. This is a common strategy for firms operating in rapidly evolving industries, as it allows them to maintain relevance and increase sales volume within their current customer base by replacing old offerings with new and improved ones.

The incorrect option is 2:
Downsizing is an operational and structural strategy focused on retrenchment, not market growth. It involves reducing the scale of the firm's operations, often through cost-cutting measures like reducing staff, closing facilities, or withdrawing from certain business segments. Its goal is typically to improve short-term profitability, survival, or efficiency during challenging times. As the original question describes a strategy for offering a *new product*—an act of growth and investment—Downsizing is completely contradictory to the stated objective.

The incorrect option is 3:
Diversification is a strategy defined by launching a new product into a new, previously unserved market. This is generally considered the highest-risk growth option in the Ansoff Matrix because it combines two major uncertainties: the success of a new product and the acceptance of that product in an unfamiliar market. Since the strategy in the question is focused on an *existing market*, not a new one, it does not meet the criteria for Diversification.

The incorrect option is 4:
Market Development refers to taking an *existing* product and introducing it into a *new* market. This could involve finding new geographic markets, new demographic segments, or new channels of distribution. The key differentiating factor from the scenario described is that the product is already established and successful. Since the question is about an offer of a *new* product, Market Development is logically inaccurate for classifying the company's strategic move.