Growth through product-market expansion: Evaluating growth opportunities beyond a firm’s existing business

Abstract

Growth is a critical driver of long-term success for firms. As firms in mature markets face slowing core business growth, expanding into adjacent markets can be the only way to sustain growth. However, such moves also involve greater uncertainty and complexity. While academic literature acknowledges the importance of structured decision-making in these contexts, existing frameworks often treat market attractiveness and competitive advantage separately, offering limited guidance on how to combine them. This thesis ad-dresses that gap by developing an integrated evaluation framework for assessing product-market expansion opportunities beyond the existing business.

The developed framework draws on three literature streams, adjacency growth, corporate diversification, and market competition, to address two fundamental questions concerning the identified growth opportunity: (1) Is the underlying market attractive? and (2) Can the firm establish a favourable competitive position within it? The framework is applied in a qualitative case study of a global manufacturing company exploring entry into a related product category. Using internal data, strategic planning materials, and twelve semi-structured interviews with internal experts and external stakeholders, the study analyses market size, growth drivers, profit pool dynamics, customer purchase criteria, and the firm’s relative capabilities.

The results show that combining external market characteristics with in-ternal sources of advantage offers a robust basis for evaluating adjacent growth opportunities. In the case context, the analysis supports a recommendation to proceed with the expansion. Beyond the case, the study provides a generalizable framework for firms seeking to grow beyond their core, offering practical guidance for linking market evaluation with competitive positioning in strategic decision-making.