Discuss The Strategic Options And Provide Examples Marketing Essay

Discuss The Strategic Options And Provide Examples aliment commercializeing Essayglobalization is the system of interaction among the countries of the world in order to capture the global economy. Globalization refers to the integration of economics and societies every over the world. It involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation and infrastructure. http//hubpages.com/hub/Definition-of-GlobalizationIntegration in globalization is each negative or positive depends breaking down of trade barriers. The removal of barriers can be beneficial for reapings that ar important to the economy growth. An example of merchandise raw materials is real expensive only when the cost result be down if the supply will increase and will bind cheaper to produce the final examination overlaps for export.2STRATEGYStrategy is reflects decisions to offer particular harvestings or services in the particu lar markets. The strategic excerptions for the exploring opportunities in the forward-lookingborn established market and vivacious product atomic number 18 broad(a) chance to character the availability resources. It is a tool in the direction of the firms objective in achieving melodic line success in the long end point. corporate STRATEGYThis is the focus of an organization which products or service markets to compete and area to operate. This is because market definition is the domain of corporate level strategists, the responsibility for diversification, addition of overbold products or services to the living product, also falls within the realm of corporate-level schema.A Strategic Alliance is a race between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.Businesses use strategic alliances toAchieve advantages of scale, scope and speedIncrease market penetrationEnhance competiti veness in domestic and/or global marketsEnhance product developmentDevelop new business opportunities through new products and servicesExpand market developmentIncrease exportsDiversifyCreate new businesses drop costs.3How to enter MarketThe best mode of entry its broad choices are indirect exporting, direct exporting, licencing, joint surmisals and direct investment.A joint venture is an correspondence by two or more parties to variance a single entity to undertake a certain project. Each of the businesses has an equity stake in the singular business and share revenues, expenses and profits.Joint ownership has certain drawbacks. The partners might disagree over investment, marketing, or other policies. One partner might want to reinvest loot for growth, and the other partner might want to take forth these earnings. Furthermore joint ownership can hamper a multinational ships company from carrying out specific manufacturing and marketing policies on a worldwide basis.Licensin g is a simple way for a manufacturer to become involved in International business. The licensor enters an promise with a licensee in the foreign market, offering the right to use a manufacturing process trademarks, intellectual property and trade secrets are licensed to an external firm. Its apply mainly to manufacture and sell a certain product. Its a lower risk way of expanding the reach of product compared to building company manufacturing base and dispersal reach.Coca-cola is an example of an international market by licensing bottlers around the world.Franchising is an excellent way of quickly rolling out a successful concept nationwide. Franchisees pays fixed bung and agree to ongoing payments so the process is financially risk-free for the company. However, downsides do exist, particularly with the loss of control over how franchisees run their franchise. It is thus an important form of vertical market integration. Potentially, the system provides an effective blending of skill centralization and operational decentralization. It permits the franchise to sell products or services under a exceedingly publicized brand name and a well-proven set of procedures it is a carefully developed and controlled marketing schema.Examples of franchisers are hotels brands i.e. Hilton, Holiday in and Coco-cola.Advantages of forming strategic alliancesProvide companies with the opportunity to garner new capacity and expertiseAllow companies to enter connect businesses or new geographic markets or gain new technological fellowshipaccess to greater resources, including specialized staff and technologysharing of risks with a venture partnerDisadvantages of strategic alliancesIt takes time and effort to build the right relationship and partnering with another business can be challenging. Problems are likely to arise ifThere is an imbalance in levels of expertise, investment or assets brought into the venture by the variant partners.Different cultures and management s tyles result in poor integration and co-operation.The partners dont provide enough leadership and support in the early stages.Success in a joint venture depends on thorough research and analysis of the objectives.Examples of strategic alliances companiesSony-Ericsson is a joint venture by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones.Virgin Mobile India Limited is a cellular telephone service provider company which is a joint venture between Tata Tele service and Richard Bransons Service Group. http//wiki.answers.com/Q/Examples_of_joint_venturesixzz1KAPliPOBProduct StrategiesIs the central focus of the marketing mix. It is fails to satisfy the needs of the consumers, no amount of promotion, price cutting, or distri notwithstandingion will persuade them to buy. The total product, which is what the customer buys, which also include the package, the brand name, accessories, after gross sales service , the warranty and instructions for use. Thus international product strategies and policies should include the hobby aspects.4Strategies MatrixAnsoff Matrix has quaternary strategies which an organization will be good to process for good foundation of the company future development. Ansoff matrix focused on the firms present and potential products and market, customers by considering ways to grow through active products and new products and in existing market and new markets. It is one of the best tools for the companies to develop market and product expansion.Market Penetration,Product development,Market DevelopmentDiversificationDiagram below indicate the Ansoff Matrix faculty.msb.edu/homak/homahelpsite/webhelp5MARKET PENETRATIONIs a term that indicates how profoundly a product or service has become entrenched with a given consumer market. The degree of penetration is often measured by the amount of sales that are generated within the market itself, increasing sales force, inc rease distribution and promotion of products, more expenditure in marketing and advertising activities will results in increasing sales.Market penetration can be considered in broader terms, and be used as a way of identifying a wider consumer base. Penetration expands the influence of the product to new consumers and thus increases the sales and general proportion of the consumer market that the manufacturer controls. http//www.wisegeek.com/what-is-market-penetration.htmMarket penetration seeks to achieve four main objectivesThe market share of legitimate products should be maintained, this will be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhapsDominance of growth markets should be securedCompetitors should be driving to restructure a mature market, promotion campaign should be more aggressive for the same pricing strategy should be designed to make difficult to the competitorsImplemented loyalty scheme for the existing custome rs.6Examples of Market PenetrationDellRecognizing the software as a service can be a potent market penetration tool, also assembling a services portfolio that now includes e-mail disaster reco really, spam/virus filtering and archiving via its Message one acquisition. airline businesss Easyjet Airline market was by offering flights for the small distance cities. Southwest Airline same as Easyjet were more profitable on operating small distancesPakistan sound out Oil penetrates in Pakistan market growth from 40% to 65% in the duration of 4 days by developing new retail outlets. elevator car ManufacturingToyota Motor Corporation is the worlds largest automobile manufacturer by sales and production. Toyota and BMW good relationship in marketing in order to retain and have blue profile for their value customers. Toyota Motor Corporation is the largest conglomerates in the world. Toyota has grown to a large multinational corporation from where it started and expanded to unalike worl dwide markets and countries.BankingHSBC Bank customers were very happy on internet banking that they can access their online account 24hrs a day wherever they are in the world.TelecommunicationAirtel promoting its services to penetrate in the Indian market. It is the worlds fastest growing industry, they have jibe of joint ventures with Alcatel in Indian, it is operates in 19 countries across South Asia, Africa and the Channel Islands. Airtel is the fifth largest telecom floozie in the world. http//en.wikipedia.org/wiki/Market_penetration7Advantage and Disadvantage of Market PenetrationBenefitsOne of the successful penetration is pricing strategy may lead to large sales volumes/market shares and whence lower costs per unit. Penetration strategies are often used by businesses that need to use up spare resources. A penetration pricing strategy may also promote complimentary and captive products. The main product may be priced with a low mark-up to attract sales.RiskThe most trans lucent potential disadvantage of market penetration is the likelihood of competing suppliers following suit by reducing their prices, May lead to a price war with a competitor with the same strategyThe effects of economies of both scale and experience lead to lower production costs, which justify the use of penetration pricing strategies to gain market share Low pricing could be detrimental to the perceive brand value and to the company reputation.Another potential disadvantage is the impact of the bring down price on the image of the offering, particularly where buyers associate price with quality.http//tutor2u.net/business/marketing/pricing_strategy_penetration.asp8MARKET DEVELOPMENTMarket development is a marketing technique aimed at increasing a companys market in order to widen the customer base for the purpose of selling more products.This is an important aspect of helping a company grow. Small companies with limited marketing experience may turn to consultants for this, whi le experienced large companies have internal marketing departments that may be responsible for market development. It is an ongoing part of doing business for successful companies. Also will help to grow your market by understanding how your product is perceived in the marketplace and what areas of alterment are there.Using the Starbucks exampleThis oversteps when the market analyzing makes some sort of change, market development has occurred over the past couple of years as consumers are becoming more health conscience. Preferences are moving toward different types of teas/drinks and consumers are demanding more healthy alternatives. These factors have aided to market development, with different franchises popping up, such as Argo tea, which become direct competitors to StarbucksBenefitsAnother way would be to focus on the technology base used to supply existing products and to identify other products needs, which customers might need to be produced using current facilities and k now how.Here the organization tries to develop new products or services and thereby makes similar existing products obsolete unlike product development strategy which extends an existing products life cycle. There could be radical innovations where the company tries to step in existing products or technologies in an industry. In the case of incremental innovations, the firm tries to put focus on new products or services that modify the existingones.aside from such radical innovations firms, also carry out incremental innovations to differentiate their products. One example, is Toyotas multi-utility fomite Qualis. Although other Indian companies had similar products, Toyota, more effectively feature the styling an engineering that resulted in increased demand for its product (a great hit compared) to Sumo,Disadvantages/RisksAs per Ansoff framework of a Market Development strategyNew Markets may be different then expected ( especially in new geographic market with cultural differenc esCostly modifications may be requiredExamples of Market DevelopmentCompact disc technology has virtually replaced long playing vinyl records in the recording industry, and high definition television is likely to replace regular television technology.McDonalds has couple of new markets in the wake of globalization with its existing products. This is because of the nature of the business and products, McDonald implemented its burgers which helps the growth of the market.Nestle expanded the market for its product Milkmaid by advertising the new uses of the product aggressively in India.Chinese products developed new market for their product worldwideToyotas multi-utility vehicle Qualis although there are same product in India,Toyota, more effectively combined the styling an engineering that resultedin increased demand for its product than Indian.Close Up toothpaste was foremost gel toothpaste which was transparent with a red distinctive colour, all others pastes were white. The marke t was dominated by Colgate which promised that itwould fight tooth decay and bad breath. Close up promised the dual benefit of being a toothpaste and mouthwash in one and thus delivered fresh breath and white teeth.9PRODUCT DEVELOPMENTThis is a new product to be marketed to our existing customers. Here we develop and innovate new product offerings to replace existing ones. Such products are then marketed to our existing customers. This often happens with the auto markets where existing models are updated or replaced and then marketed to existing customers.http//www.marketingteacher.com/lesson-store/lesson-ansoff.htmlDeveloping of new products and offering to the existing market is product development strategy which need gravid and time to implement. The company has to do a market survey in detailed if it is feasible to introduce new product in the current market.Challengesseveral(prenominal) things need to be checked in developing new products in the company this is including,Techn ology and Cost, by using latest technology the product instruction execution or the quality of products will be on highest level of functionality although Cost will be challenge to the company in either buying the new equipments or conducting trainings.BenefitsCompany products will be extended by producing different variants, packaging in new ways.Service industries shorten time to market and improve customer service and quality.RisksCustomers might be confused among the existed and developed products, if the analysis will not performed carefully, example is the new snow, Customers liked the taste of the new Coke in the taste tests conducted by Coca Cola, customers of the brand favoured classic Coke over the new product.Another Examples of Market DevelopmentGoogle developed a new browser chrome for the existing internet userMcDonalds is always within the fast food industry, but frequently markets new burgers10DIVERSIFICATION STRATEGYDiversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets. Diversification can occur either at the business unit level or at the corporate level. Diversification is very important into related and unrelated areas.http//www.coursework4you.co.uk/essays-and-dissertations/ansoff-analysis.phpDiversification related in the form of backward, forward, and horizontal integration.Concentric diversificationThis means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage. For example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers. The technology would be the same but the marketing effort would need to change.The company will focus to add more market share to launch a new product that helps the company earn more profit. An example technological related in concentr ic diversification is Tomato ketchup and sauce to the existing brand processed items of food specialties.Vertical diversificationThis is when the company is closer to the raw materials sources in production, in another words is backward vertical integration strategy. An example of Avons line on cosmetics business. Avon pursued a backward form of vertical integration by entering the production of cosmetics. Forward diversification occurs when Avon move closer to the consumer in term of production stages.Horizontal diversification, occurs when a company develops interests complementary to its current activities. For a company may integrate its activities to include all aspect of the value mountain range design, manufacture, market and distribute. The company adds new products or services that are often technologically or commercially unrelated to current products but that may attract to current customers. In a competitive environment, this form of diversification is desirable if th e present customers are loyal to the current products and if the new products have a good quality and are well promoted and priced. For example, Avons move to market jewelry through its regular sales force involved marketing new products through existing channels of distribution.Conglomerate diversification (or lateral diversification)The company markets new products or services that have no technological or commercial synergies with current products but that may appeal to new groups of customers. The conglomerate diversification has very little relationship with the firms current business. Therefore, the main reasons of adopting such a strategy are first to improve the profitability and the flexibility of the company, and second to get a ameliorate reception in capital markets as the company gets bigger. Even if this strategy is very risky, it could also, if successful, provide increased growth and profitability.For example a company whose core business is media services may diver sify into provision of financial services.Advantages of diversification strategyControl markets by guaranteeing sales and distribution. This can arise through a combination of linkages in the value chain. For example where production and distribution channels are combined, or where a company uses its well-established brand names or corporate identity to gain benefits in new marketsTake advantage of existing expertise, friendship and resources in the company when expanding into new activities. This may result in transfer of skills, such as research and development knowledge and sharing of resources.Provide better risk control through no longer being reliant on a single marketSpread risk by avoiding having all eggs in one basketDisadvantages of diversification strategyAdding bureaucratic complexity. In addition to direct financial costs, there may additional bureaucratic complexities necessitated by the need to coordinate and control core activities with additional activities.Diversi fication through acquisition across national boundaries may result in the government having to deal with varying intricacies of the political and legal requirements of the different countries in which the organisation has controlling interests.Diversification also acquisition May result in ill fortune where there is a mismatch between core competencies Adding management costs.Adding bureaucratic complexity. In addition to direct financial costs, there may additional bureaucratic complexities necessitated by the need to coordinate and control core activities with additional activities.ExamplesVirgin Media moved from music producing to travels and mobile phonesWalt Disney moved from producing animated movies to theme park and spend propertiesCanon diversified from a camera making company into producing whole new range of office equipmentCONCLUSIONIt is true for the world investment and business to move from national and domestic markets to a worldwide environment. Globalisation eli minates all boundaries, causing firms to engage in business worldwide. Consequently firms have to deal with couple of challenges if the management strategies will not help them to make the correct choices and decisions. Strategic options related to products and services which a firm may offer in which markets are critical to the success of companies. The differences in strategic choices of the firm can often be attributed to the type of market in which the company operates. Changes in business environment play a crucial role in the strategic options that an organisation may pursue over its future development. There are risks associated with all of the four strategic options entailed in the Ansoff matrix. Market penetration is generally considered as a low risk strategy while diversification, on the other hand, is deemed as a high risk growth strategy as it involves moving simultaneously into new products and new markets. Diversification remains a popular strategic option for firms i n todays competitive business arena, and if the diversification strategy is consistent and well throughout, like the case of IBM, significant improvements in profitability can be experienced.