One useful device for identifying growth opportunities is the productmarket

One useful device for identifying growth

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One useful device for identifying growth opportunities is the product/market expansion grid , shown in Figure 2.3. Product/market expansion grid
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A portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification Market penetration Company growth by increasing sales of current products to current market segments without changing the product. It might add new stores in current market areas Improvements in advertising, prices, service, menu selection, or store design Figure 2.3 The Product/Market Expansion Grid market development —identifying and developing new markets for its current products. For instance, managers could review new demographic markets Perhaps new groups—such as seniors Managers could also review new geographic markets Third, Starbucks could consider product development —offering modified or new products to current markets. Diversification Company growth through starting up or acquiring businesses outside the company’s current products and markets. Companies must develop not only strategies for growing their business portfolios but also strategies for downsizing them. There are many reasons why a firm might want to abandon products or markets.: - The firm may have grown too fast or entered areas in which it lacks experience. -The market environment may change, making some products or markets less profitable. -Finally, some products or business units simply age and die. When a firm finds brands or businesses that are unprofitable or that no longer fit its overall strategy, it must carefully prune, harvest, or divest them. Weak businesses usually require a disproportionate amount of management attention. Managers should
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focus on promising growth opportunities, not fritter away energy trying to salvage fading ones. 3 PLANNING MARKETING: PARTNERING TO BUILD CUSTOMER RELATIONSHIPS The company’s strategic plan establishes what kinds of businesses the company will operate and its objectives for each. Then, within each business unit, more detailed planning takes place. The major functional departments in each unit—marketing, finance, accounting, purchasing, operations, information systems, human resources, and others—must work together to accomplish strategic objectives. Marketing plays a key role in the company’s strategic planning in several ways. First, marketing provides a guiding philosophy —the marketing concept—that suggests that company strategy should revolve around building profitable relationships with important consumer groups. Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and assessing the firm’s potential to take advantage of them.
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