The contemporary product-market strategy grid and the link to market orientation and profitability

Abstract

Recognising the complexity and originality of contemporary marketing strategies, the authors present an updated version of Ansoff ’ s product-market growth strategic matrix, with nine distinct growth options replacing the original four options in Ansoff ’ s model. In the proposed product- market growth model, aggressive product-market growth strategies are defi ned as those involving new products, new markets or some combination of the two. Utilising data collected from fi rms in the fi nancial services industry, the authors show a relationship between a fi rm ’ s level of market orientation and the aggressiveness of their product-market growth approach. Finally, in looking at the profi tability of the various product-market growth strategies, the results indicate that the most conservative strategy of penetration-saturation actually leads to signifi cantly higher profi tability, as measured by ROA, than three of the more aggressive strategies: related diversifi cation, intensive product development or intensive growth.