The product-market growth matrix, first proposed by Igor Ansoff, is a tool managers use to consider growth options and strategies. Ansoff, called the master of corporate strategy, was a professor of strategic management at U.S. International University in San Diego, California. Most businesses have growth as a goal—i.e., expanded sales and increased PROFITS. In seeking these goals, managers consider both its markets and its products. The product-market growth matrix, as displayed below, suggests four options: market penetration, market development, product development, and diversification. Market penetration involves expanding the sales of existing PRODUCTs in existing markets. A manager considering a market-penetration strategy will increase ADVERTISING, PERSONAL SELLING, and SALES PROMOTION of their products. Building stronger relationships with DISTRIBUTION CHANNEL members can also foster market penetration. Markets with overcapacity among producers and saturated consumer DEMAND offer few opportunities for market penetration. Market development involves attempting to sell a firm’s existing products in new markets. Decisions to expand into new areas of the country and international markets are examples of market development. A wholesale company that decides to offer its products and SERVICES directly to retail consumers and a retail business considering competing for government contracts are examples of market development. Product development involves creating new products for existing markets. Many companies grow by identifying or anticipating current customers’ additional needs. For retailers, requests from customers for products a company does not currently offer can lead to product development. Customers using a manufacturer’s product in an unanticipated way can also lead to ideas for product development. Often a company’s sales force is an excellent source of suggestions for opportunities to grow due to knowledge of their customers’ wants and needs. One limitation of product development is cannibalization—situations where expanded sales of new products come with decreased sales of existing products. However, a company that does not create new products leaves itself vulnerable to competitors who do offer new and improve products. The rapid level of innovation in consumer technology products in the last 10 years is an example of constant product-development strategies. Diversification involves creating new products for new markets. This is a more difficult and risky growth strategy, because it involves two unknowns: new products and new markets. Like financial diversification, though, successful diversification into new products and new markets reduces a firm’s overall business RISK. Major CORPORATIONs in the United States often diversify by acquiring another company in a market they wish to pursue.