Gaining sales growth through unsustainable and

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Gaining sales growth through unsustainable and incremental moves 1. International Markets Appears lucrative, but established markets (western Europe & Japan) are as competitive and mature as domestic Emerging markets: market sizes actually smaller, weak consumer/industrial purchasing power, inefficient distribution channels, economic instability and protectionist laws In the best markets, they often produce competitors that challenge you there and at home (Korea with Samsung) 2. M&A Rapid pace of expansion unlikely to continue Rarely produce new value and can be damaging. Inflated stock prices are back to reality, so cant make cheap acquisitions. Some industries are so consolidated, that they face antitrust concerns as barriers to future M&A 3. Price increases Most industries, demand has slackened, and competition intensified so little room to increase prices. Actually face downward price pressure This affect strategy formulation as managers must understand that these measures are temporary and will not lead to sustainable future sales growth. In some cases, they can accelerate your sales growth decline in the future. 5
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BU481 – Midterm #2 Questions- List 1 & 2 2010 11. According to the article “The growth crisis and how to escape it”, please define and describe the concept of “hidden assets”. Which elements within a firm are considered “Hidden Assets”? Please define and describe three benefits of these “hidden assets”. Hidden Assets: natural by-products of creating and delivering core products and services that can be used to create a portfolio of related products. underutilized resources that have taken years. EX: Johnson: company’s market position as leading player in seat production, could take on role of integrating subsystems Elements: Benefits: 1. Once created, they can be reused, applied, and extended at little or no marginal costs & new rivals will find it hard to build up the hidden assets that have take you so long and a lot of money to do 2. Focusing on customer higher order needs can help to reinforce, rather than cannibalize your core products as multidimensional connections with customers increase your chances to sell your traditional products 3. They frequently engender new assets that lead to yet more offerings (the more you use them, the more you have). Establishing additional touch points with your customers just gives you more opportunities to understand-and solve-their problems. 12. According to the article “The growth crisis and how to escape it”, please define and describe three categories of “Hidden Assets”. Define and describe two asset types within each category. 1. Customer Relations Assets in this category provide a critical gateway to understanding and addressing higher-order needs.
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