When a company tries to improve its existing products to attract more customers, it is using which strategy?

The strategy described in the question, where a company focuses on enhancing its existing products to draw in more customers, is indeed product development. This approach involves modifying and improving current offerings or even adding new features and benefits that make the product more appealing to consumers. It can lead to increased customer satisfaction and retention, as well as potentially attracting new customers who see the enhanced value in the product.

In the context of the other strategies, diversification refers to a company expanding into new markets or product lines that are distinct from its existing operations. Cost-cutting focuses on reducing expenses to improve profitability, which does not directly relate to product enhancement. Market penetration involves increasing sales of existing products in existing markets, which may include optimizing pricing or marketing but doesn’t specifically highlight improvements to the products themselves. Thus, product development is clearly the strategy that aligns with the goal of improving existing products to attract more customers.