Which growth strategy is medium risk and involves selling existing products in new markets?

Which growth strategy is medium risk and involves selling existing products in new markets?

• A. Franchise
• B. Market Development
• C. Product Development
• D. Market Penetration

Answer: (B)

Expanding into new markets with existing products. This describes Market Development, where a company uses its current product lines to reach customers in markets it hasn’t previously served. The reason this is medium risk is that you’re leveraging products you already know well, so development costs and uncertainties are lower than launching new products. However, entering unfamiliar markets introduces unknown demand, different consumer preferences, distribution channels, and regulatory environments, which increases risk compared to staying in the same markets with the same products. For example, a beverage brand starts selling its drinks in a new country rather than creating a new product or focusing on selling more in its current market. This differs from product development (new products for the existing market) and market penetration (more sales in the current market), and while franchising can enable market entry, the core idea here is selling existing products in new markets.

Expanding into new markets with existing products. This describes Market Development, where a company uses its current product lines to reach customers in markets it hasn’t previously served. The reason this is medium risk is that you’re leveraging products you already know well, so development costs and uncertainties are lower than launching new products. However, entering unfamiliar markets introduces unknown demand, different consumer preferences, distribution channels, and regulatory environments, which increases risk compared to staying in the same markets with the same products. For example, a beverage brand starts selling its drinks in a new country rather than creating a new product or focusing on selling more in its current market. This differs from product development (new products for the existing market) and market penetration (more sales in the current market), and while franchising can enable market entry, the core idea here is selling existing products in new markets.