Developing strategies for growth and downsizing
Companies need growth if they are to compete more effectively, satisfy their
stakeholders and attract top talent.
Marketing needs to identify, evaluate and select market opportunities and establish
strategies for capturing them. One useful device for identifying growth opportunities is
product/market expansion grid 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 can spur growth through marketing mix improvements – adjustments to its product
design, advertising, pricing and distribution efforts. Company could also add direct-to
consumer distribution channels including its own retail stores or a Freephone call centre.
Market development
= company growth by identifying and developing new market segments for current
company products.
Product development
= company growth by offering modified or new products to current market segments.
This would maybe put the company into direct competition with current providers, but it
also offers promise for big growth.
Diversification
= company growth through starting up or acquiring businesses outside the company’s
current products and markets.
When diversifying, companies must be careful not to overextend their brands’
positioning.
Companies need growth if they are to compete more effectively, satisfy their
stakeholders and attract top talent.
Marketing needs to identify, evaluate and select market opportunities and establish
strategies for capturing them. One useful device for identifying growth opportunities is
product/market expansion grid 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 can spur growth through marketing mix improvements – adjustments to its product
design, advertising, pricing and distribution efforts. Company could also add direct-to
consumer distribution channels including its own retail stores or a Freephone call centre.
Market development
= company growth by identifying and developing new market segments for current
company products.
Product development
= company growth by offering modified or new products to current market segments.
This would maybe put the company into direct competition with current providers, but it
also offers promise for big growth.
Diversification
= company growth through starting up or acquiring businesses outside the company’s
current products and markets.
When diversifying, companies must be careful not to overextend their brands’
positioning.
