Discuss The Strategic Options And Provide Examples Marketing Essay

Discuss The Strategic Options And extend Examples Marketing EssayGlobalization is the system of interaction among the countries of the world in order to break a flair 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 globalisation is either negative or positive depends breaking big bucks of trade barriers. The removal of barriers gutter be beneficial for harvest-tides that be important to the economy egress. An representative of imported piercing materials is very expensive but the cost leave be down if the supply will increase and will use up cheaper to produce the last(a) harvestings for export.2STRATEGYStrategy is reflects decisions to offer point harvest-homes or dish ups in the dampen icular grocery stores. The strategical options for the exploring opportunities in the innovative established food grocery store and lively product atomic number 18 true(p) opportunity to use the availability resources. It is a motherfucker in the direction of the firms objective in achieving avocation success in the long destination.CORPORATE STRATEGYThis is the focus of an organization which products or service merchandises to compete and bea to operate. This is because foodstuff definition is the domain of corporate direct strategists, the responsibility for diversification, addition of unfermentedly products or function to the quick product, in like manner falls within the realm of corporate-level system.A Strategic Alliance is a birth between two or much parties to pursue a set of agreed upon goals or to meet a critical blood consider while remaining independent organizations.Businesses use strategic alliances to strive advantages of scale, scope and s peedIncrease market penetrationEnhance battle in domestic and/or global marketsEnhance product suppurationDevelop brand- peeled avocation opportunities with new products and work open market knowledgeIncrease exportsDiversifyCreate new championshipes slue costs.3How to enter MarketThe best mode of entry its broad choices ar indirect exporting, direct exporting, licencing, joint jeopardizes and direct investment.A joint venture is an agreement by two or more parties to form a single entity to undertake a genuine project. Each of the businesses has an equity take chances in the individual business and side revenues, expenses and profits.Joint ownership has certain drawbacks. The helpers cleverness disagree over investment, selling, or other policies. One go out might urgency to reinvest earnings for growth, and the other partner might want to take out these earnings. Furthermore joint ownership toilette bar a multitheme guild from concuring out specific manufa cturing and trade policies on a worldwide basis.Licensing is a simple course for a manufacturing business to become involved in International business. The licensor enters an agreement with a licensee in the foreign market, offer the right to use a manufacturing process trademarks, adroit property and trade secrets be licensed to an external firm. Its used in the initial place to manufacture and sell a certain product. Its a firster take a chance way of expanding the reach of product compared to building connection manufacturing base and statistical distribution 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 boffo concept nationwide. Franchisees pays restore fee and agree to ongoing payments so the process is pecuniaryly risk-free for the caller. However, downsides do exist, particularly with the loss of potency over how franchisees run their franchise. It is he nce an important form of vertical market integration. Potentially, the system provides an effective intermix of skill centralization and operational decentralization. It permits the franchise to sell products or go under a highly publicized grease name and a swell-proven set of procedures it is a carefully developed and makeled marketing dodge.Examples of franchisers are hotels punctuates i.e. Hilton, vacation in and Coco-cola.Advantages of forming strategic alliancesProvide companies with the opportunity to gain new capacity and expertiseAllow companies to enter link businesses or new geographical markets or gain new technological knowledgeaccess to great resources, including specialized staff and applied sciencesharing of risks with a venture partnerDisadvantages of strategic alliancesIt takes time and effort to build the right relationship and partnering with another(prenominal)(prenominal) business can be challenging. Problems are likely to mug up ifthither is an imb alance in levels of expertise, investment or assets brought into the venture by the diverse partners.Different cultures and commission styles impart 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 investigate and depth psychology 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 fluid India Limited is a cellular telephone service provider company which is a joint venture between Tata Tele service and Richard Bransons process Group. http//wiki.answers.com/Q/Examples_of_joint_venturesixzz1KAPliPOB mathematical product StrategiesIs the central focus of the marketing mix. It is fails to satisfy the needs of the consumers, no sum up of promotion, price cutting, or distribution will persua de them to buy. The total product, which is what the client buys, which also include the package, the brand name, accessories, after gross revenue service, the warranty and book of instructions for use. Thus international product strategies and policies should include the following reflections.4Strategies ground substanceAnsoff Matrix has four strategies which an organization will be good to process for good foundation of the company future development. Ansoff matrix focused on the firms get and potential products and market, customers by considering ways to grow through animate products and new products and in living market and new markets. It is one of the best tools for the companies to develop market and product expansion.Market shrewdness,Product development,Market evolutionvariegationDiagram below indicate the Ansoff Matrix faculty.msb.edu/homak/homahelpsite/webhelp5MARKET PENETRATIONIs a term that indicates how deeply a product or service has become fix with a given consumer market. The degree of penetration is lots measured by the amount of gross revenue that are generated within the market itself, increasing gross revenue contract, increase 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 obtain four main objectivesThe market share of menstruation products should be maintained, this will be achieved by a combination of belligerent pricing strategies, advertising, sales promotion and perhapsDominance of growth markets should be securedCompetitors should be private road to restructure a mature mar ket, promotion campaign should be more aggressive for the selfsame(prenominal) pricing strategy should be designed to make difficult to the competitorsImplemented loyalty scheme for the existing customers.6Examples of Market PenetrationDellRecognizing the software as a service can be a potent market penetration tool, also assembling a function portfolio that now includes e-mail disaster recovery, spam/virus filtering and archiving via its heart one acquisition.Airlines Easyjet Airline market was by offering flights for the small hold cities. Southwest Airline same as Easyjet were more profitable on operating small distancesPakistan State Oil penetrates in Pakistan market growth from 40% to 65% in the duration of 4 years by developing new retail outlets.Car ManufacturingToyota Motor Corporation is the worlds largest move manufacturer by sales and output. Toyota and BMW good relationship in marketing in order to retain and pay high profile for their evaluate customers. Toyota Motor Corporation is the largest conglomerates in the world. Toyota has grown to a large multinational corporation from where it started and spread out to distinct worldwide markets and countries.BankingHSBC Bank customers were very quick on internet banking that they can access their online account 24hrs a twenty-four hours wherever they are in the world.TelecommunicationAirtel promoting its services to penetrate in the Indian market. It is the worlds extravagantest growing industry, they have couple 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 operator 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 at that placefore level costs per unit. Penetration strategies are ofttimes used by business es 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 obvious potential disadvantage of market penetration is the likelihood of competing suppliers following suit by reducing their prices, whitethorn lead to a price war with a competitor with the same strategyThe effects of economies of both scale and father lead to lower production costs, which justify the use of penetration pricing strategies to gain market share Low pricing could be detrimental to the perceived brand value and to the company reputation.Another potential disadvantage is the impact of the trim back 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 proficiency aimed at increasing a companys market in order to expand the customer base for the purpose of selling more products.This is an important fount of helping a company grow. Small companies with limited marketing experience may turn to consultants for this, while experienced large companies have national 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 amelioration are there.Using the Starbucks exampleThis occurs 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 leaseing more healthy alternatives. These factors have aided to market development, with different franchises daddy up, such as Argo tea, which become direct competitors to St arbucksBenefitsAnother 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 stream facilities and know 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 alternate 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.Apart from such radical innovations firms, also carry out incremental innovations to differentiate their products. One example, is Toyotas multi-utility vehicle Qualis. Although other Indian companies had similar products, Toyota, more effectively combined the styling an engineering that resulted in change magnitude demand for i ts 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 differencesCostly 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 sty ling an engineering that resultedin increased demand for its product than Indian.Close Up toothpaste was first gel toothpaste which was transparent with a red distinctive colour, all others pastes were white. The market was dominated by Colgate which promised that itwould fence tooth decay and bad glimmer. Close up promised the dual benefit of universe 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 with child(p) and time to implement. The company has to do a market survey in detailed if it is feasible to introduce new product in the live market.ChallengesSeveral things need to be checked in developing new products in the company this is including,Technology and Cost, by using latest technology the product performance 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 Coke, Customers liked the savoring 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 STRATEGYvariegation 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 government agency 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 sell 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 concentric diversification is tomato ketchup and sauce to the existing brand processed items of food specialties. unsloped 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 reliable activities. For a company may integrate its activities to include all aspect of the value chain design, manufacture, market and distribute. The company adds new produ cts or services that are often technologically or commercially unrelated to current products but that may appeal to current customers. In a competitive environment, this form of diversification is desirable if the 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. cumulate 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 amend 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 tenderness business is media services may diversify 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, knowledge 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 orchis 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.Diversification through acquisition across national boundaries may result in the organisation 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 failure 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 travel from music producing to travels and mobile phonesWalt Disney moved from producing animated movies to theme park and vacation propertiesCanon diversified from a camera m aking 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 eliminates all boundaries, causing firms to take over 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 slackly considered as a low risk strategy whi le 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 trunk a popular strategic option for firms in todays competitive business arena, and if the diversification strategy is consistent and well throughout, like the case of IBM, meaning(a) improvements in profitability can be experienced.