Diversification is just one of four growth strategies of the Ansoff Matrix (below), which shows the four ways a firm can increase sales:
1. Market penetration – is growing sales of existing products in existing markets. For instance, Starbucks have started writing names of customers on coffee cups. The intention of this is to increase sales as a result of greater customer satisfaction.
2. Product Development – intends to increase sales by launching new products into an existing market. An example of this would be Starbucks introducing a new premium coffee made with rare and exclusive beans.