Question

When Sunshine Inc., a cosmetics manufacturer, introduced an additional line of perfumes, the response from its existing customers was good. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy.Select one:a. market developmentb. product developmentc. market diversificationd. product differentiatione. market penetration

Answer 1

Answer:

B. Product development

Explanation:

A product development strategy is used when an existing company, with an existing customer base, tries to grow by introducing new products and/or services that target its customer base. This strategy entails more risk than market penetration but similar risks that market development.

The company can extend its product range by:

Research and Development investment, commonly used by tech companies like Apple who extend their product range constantly.

Buying the rights to produce products and services originally developed by other companies.

-Investing in the R&D of additional products, like when Microsoft developed Xbox One X.

-Getting the rights to produce someone else's product, like when Dinsey bought Marvell CU.

-Acquiring a popular product and rebranding it as its own product, like when google bought Picassa and launched Google Photos.

-Cooperating with other companies to develop products and services (shared ownership), which is very common in tech industries.