Where iterative model is used?

Iterative model is used when tight market deadlines make completion of a comprehensive software product impossible, but a limited version must be introduced in order to meet competitive or business pressure; a set of core product or system requirements are well understood, but the details of product or system extensions have yet to be defined.

In these and above situations, a process model is required that has been explicitly designed to accommodate a product that evolves over time. Iterative model provides the best help in such situation.