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Market Development
Revenue
Product Extension
Diversification
Time
Intensive Strategies
Intensive Strategies
Intensive strategies
Require intensive efforts to improve a firms competitive position with existing products
Intensive Strategies
Market Penetration Seeking increased market share for present products or services in present markets through greater marketing efforts Guidelines for Market Penetration
Current markets not saturated Usage rate of present customers can be increased significantly g y Market shares of competitors declining while total industry sales increasing Increased economies of scale provide major competitive advantages
B
Leaked Market
Customers own initiative.. Image/reputation DistributionNetwork density Sales ForceDisciplined call pattern
Customers competed for and won Customers not competed for and won
Share of Market
RelationshipCaptive arrangement
* Share of Market : D + E * Winning Ratio: D/(C+D) * Market Coverage: C + D + E * Product Range: B + C + D + E * Cream Skimming Factor = Winning Ratio/Share of Market
Intensive Strategies
Market Development Introducing present products or services into new geographic area Guidelines for Market Development
New channels of distribution that are reliable, inexpensive, and good quality Firm is very successful at what it does Untapped or unsaturated markets Capital d h C it l and human resources necessary to manage t expanded operations Excess production capacity Basic industry rapidly becoming global
Intensive Strategies
Product Development Seeking increased sales by improving present products or services or developing new ones Guidelines for Product Development
Products in maturity stage of life cycle Competes in industry characterized by rapid technological developments Major competitors offer better quality products at better-quality comparable prices Compete in high-growth industry Strong research and development capabilities
Growth
Oligopoly or monopolistic Variety (build brand) Maybe selective Build selective demand Inform / Persuade Meet competition Price dealing & cutting
Maturity
Towards pure competition Battle of the brands More intensive distribution Build selective demand Inform / Persuade Meet competition Price dealing & cutting
Decline
Toward pure competition Some drop out Intensive distribution Build selective demand Inform / Persuade Meet competition Price dealing & cutting
Price
Focus:
Future Adaptation
Focus:
New or Improve?
New Markets
New Strategies
Focus:
Dying Products
Phase Out
Service Differentiation Brand Values Relationship Based d Mass Distribution Medium Many Medium/Low Medium/High Operational
Commodity Corporate Availability va ab ty Based 80 : 20 Low (Consumer Controlled) Many Medium/Low Medium/High Cost Management
Integration Strategies
Integration Strategies
Vertical Integration strategies
Allow a firm to gain control over:
Distributors Suppliers Competitors
Integration Strategies
Forward Integration Gaining ownership or increased control over distributors di t ib t or retailers t il Guidelines for Forward Integration
Present distributors are expensive, unreliable, or incapable of meeting firms needs Availability of quality distributors is limited When firm competes in an industry that is expected to grow markedly Organization has both capital and human resources needed to manage new business of distribution Advantages of stable production are high Present distributors have high profit margins
Integration Strategies
Backward Integration Seeking ownership or increased control of a firms suppliers Guidelines for Backward Integration
When present suppliers are expensive, unreliable, or incapable of meeting needs Number of suppliers is small and number of competitors large High growth in industry sector Firm has both capital and human resources to manage new business Advantages of stable prices are important Present supplies have high profit margins
Integration Strategies
Horizontal Integration Seeking ownership or increased control over competitors Guidelines for Horizontal Integration
Firm can gain monopolistic characteristics without being challenged by government Competes in growing industry Increased economies of scale provide major competitive advantages Faltering due to lack of managerial expertise or need for particular resources
Backward Integration Do you want to move positions within the supply chain?
Forward Integration
Exploration Drilling Production Platforms Transport Refinery Pipeline Distribution Depot Retail Outlet Auto Servicing
End Customer
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