In 2014, Twitter, the online messaging platform, was face to facewith some difficult choices. Share value had halved in the pastyear and many believed that the social network had peaked ataround 20 percent of the size of Facebook. Twitter has been tryingto find ways to boost the amount of time that users spend onthe platform. It was actively looking to acquire online music servicesand, according to many, had set its sights on both Sound-Cloud, valued at $700 million, and Spotify, valued at $4 billion.In acquiring new and successful businesses such as those thatoffer music streaming services, Twitter would not only be enjoyingits largest acquisition to date, but would also be securing newareas for growth. Acquisitions are, however, not new for Twitter.It bought the start-up Vine, a video-clip sharing service, in 2012,and recently acquired Gnip, a provider of social data. The problemis that Twitter is not profitable and may not have large sumsof cash to acquire a music service.

1.Explain which product/market expansion grid strategyTwitter is using in order to keep up with competitors likeApple and Facebook.

2.Discuss whether organic growth is more sustainable orwhether companies should keep pushing their growth byacquiring other companies.