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Growth Strategies: Ansoff Model. Growth in Existing Product Markets. Increase market share Can do this tactically (price reductions, increase advertising, etc.) or strategically, which involves finding a sustainable competitive advantage Attract competitors’ customers Attract non-users

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growth in existing product markets
Growth in Existing Product Markets
  • Increase market share

Can do this tactically (price reductions, increase advertising, etc.) or strategically, which involves finding a sustainable competitive advantage

    • Attract competitors’ customers
    • Attract non-users
  • Increase product usage
  • Increase the frequency used
  • Increase the quantity used
  • Find new application for current users
market penetration strategies
provide reminder communications

position for frequent use

position for regular use

provide incentives

reduce undesirable consequences of frequent use

use in different situations

Jell-O pudding

Dispensers, portable packaging

frequent flier plan

gentle shampoo

low fat versions of food

cereal as snack versus breakfast

Market Penetration Strategies
typology of new products
Typology Of New Products
  • New presentation
    • Packaging
    • Positioning
  • Product improvement and reformulation
  • Line extensions
  • Category extensions
  • New to the category
  • New to the world
the new product development process
The New Product Development Process

Marketing Premises

  • Each Brand Must Fill a Real Gap in the Marketplace.
  • Product Must Meet a Consumer Need, Based on Emerging Trends
  • Must Execute Flawlessly:
      • Positioning
      • Packaging
      • Marketing
achieving new product development success
Achieving New Product Development Success
  • A Defined New Product Process
  • Form Dedicated Cross-Functional
  • Teams
  • Fact-Based Decision-Making
  • Top Management Commitment
  • Encourage Entrepreneurial Behavior
  • Learn From Your Mistakes
shortening new product development cycle times
Shortening New Product Development Cycle Times
  • Concurrent Development (of Product, Package, Production Equipment)
  • Close Partnership With Suppliers, Equipment Manufacturers, Customers
  • Support From Top Management
  • Adequate Resourcing
  • Use of Cross-Functional Teams
market development
Market Development
  • New segments
    • Johnson & Johnson Baby Shampoo
  • New distribution channels
    • Restaurant products to retail
    • OEM to retail
  • New geographical territories
    • Regional expansion: Tasty Baking
    • International expansion
diversification
Diversification
  • Related vs. Unrelated
    • Technology, processes
    • Markets
portfolio analysis
Portfolio Analysis
  • Assessment of Business Position
  • Evaluation of Market Attractiveness
  • Generation of Cash versus

Demand for Cash

  • Treat SBU’S, Product Lines, Markets As Investment Units (Need for Balance)
  • Recommendations for Investment Strategies Based on Business Position and Market Attractiveness
portfolio models
Portfolio Models
  • Useful at Different Levels
  • of Decision Making:
      • Corporate
      • SBU
      • Product Line
  • Treats Different SBU’S, Product Lines,
  • SKU’s as Investment Units
portfolio models12
Portfolio Models

Used for Guiding Decisions Related to:

A. Achieving a Balanced Portfolio Over Time

1). Short vs. Long Term Returns

2). Providers and Users of Cash

and Other Resources

B. Investment Strategies for SBU’S,

Product Lines, SKU’S

e.g., Invest to Grow, Invest to Build,

Maintain Position, Harvest, Divest

portfolio models criteria for evaluation
Portfolio Models:Criteria for Evaluation

A. Profitability, Expected Return

B. Growth, Related to Stage of PLC

C. Risk (Variability of Return)

D. Competitive Position / Strength

E. Market Position, Share

F. Demand on, Utilization of Resources

portfolio models analytical process
Portfolio Models: Analytical Process

A.Level of Analysis

B. Define the Market

C. Time Dimension: Historical Vs. Projected

D. Identify Dimensions: Single Criterion Vs. Composite

E. Construct the Matrix and Position Individual Entities

F. Project the Future Position of Each Entity

G. Select the Desired Portfolio

H. Make Strategic Choices Based on Achieving Desired

Portfolio

bgc model
BGC Model

Dimensions

  • Market growth
    • PLC
    • Indicator of cash demand
  • Relative share
    • PIMS data
    • Indicator of cash generated
ge mckinsey model
GE-McKinsey Model
  • Use of composite dimensions:
    • Market Attractiveness
    • Business Strengths or Competitive Position
  • Provides guidance for investment strategy
dimensions of the ge matrix industry attractiveness and competitive position
Dimensions of the GE Matrix:Industry Attractiveness and Competitive Position
  • Industry Attractiveness
    • Market Size, Growth Rate
    • Industry Profitability, Margins
    • Market Diversity
    • Competitive Structure
    • Environment
  • Competitive Position
    • Size of Business
    • Growth Rate
    • Market Share, Relative Market Share
    • Profitability, Margins, Relative Cost Position
    • Technology Position
ge mckinsey matrix vertical axis market attractiveness horizontal axis competitive position
GE-McKinsey MatrixVertical Axis: Market AttractivenessHorizontal Axis: Competitive Position