The growth strategies are part of Ansoff’s matrix. The first one is the market penetration which is low risk strategy of using low pricing in the short term as a means of gaining entry into a new market or to increase market share or sales volume in an existing market. The second one is product development, this is where the company develops new features on a well-known brand and this is a medium risk strategy. The third is market development, this is where the company launches the same product but in another place, for example global. The last one is diversification, this is a high risk strategy this is when they enter a new market with a new product. Apple use mostly product development, they use these in their IPhone, the IPhone well known …show more content…
They also use market development as they have sold IPhones in more than 100 countries, this is an advantage because there are more places for IPhone to make a profit. The disadvantage of product development is that it can get costly because resources are required by the Research and Development department of the business; a lot of experiments and tests are also performed. Secondly, product development involves a risk of whether the consumers will like the new features that have been developed/added to the new/existing product. Tesco use the market penetration as the sell the same products to the same market, they don’t develop the products they sell the same general merchandise and groceries. An advantage of this is that by selling the existing products to the existing market it will speed up the growth of business because people will continuously buy them. A disadvantage of market penetration is the price-conscious customer may only make purchases based on how much the product costs while placing less emphasis on quality or brand recognition. These consumers generally are not loyal to a product or brand unless it continuously offers the lowest …show more content…
Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers. Branding is important for customers because the customer knows that the company they are buying from if there were two phones at the same price and same product but one was apple and the other were a unknown company, people would buy the apple because it is apple and they have shown their products to be of high quality. Also people would buy from Tesco because their branding is that there groceries are cheap and of high quality. Apple have built their brand up and their position. When people buy an apple product, they know the product will be of a high quality, that is the message that apple are trying to convey. One of the ways they have done this is that they train staff to present a specific image, so when you go to an apple store you will see that the staff carry with them IPads and other apple devices. Tesco have built their brand and positon to have the finest own-labeled products. They have done this buy making more Tesco brands. Brand extension is a common method of launching a new product by using an existing brand name on a new product in a different category. Apple use brand extensions because apple have launched many products under the same brand ‘apple’. Tesco use
A brand is utilized by a company to differentiate its products from others in the market. Some techniques for accomplishing this are through the use of distinguishing logos, names, color schemes, and slogans. An effective branding strategy is one of the most important components for gaining a significant advantage in a progressive market. Basically, a company brand is its promise to its customers about what can be expected from its product and how it differentiates from the competitors. The branding strategy is the part of the marketing plan that explains how and to whom the company proposes on conveying its brand messages. It will also explain where the company plans to advertise and what it will publicize both visually and verbally (Williams, 2013). Home Depot’s marketing plan will contain domestic and global branding strategies and will be a collaboration of brand messages from both Home Depot and Reach the Top®.
Brand extension is a useful way to introduce promising products that will revive the brand name in hopes of retaining its loyal customers. Take a company of the magnitude as Molson Coors Brewing Company, established in 1873, whereby producing its famously known beer (Coors, 2017). There were several flavor offerings for the bottled sparkling water such as original, lemon-lime, and cherry (Time, 2009).
On the Ansoff matrix below is shown what growth strategies for new and existing products and markets can be used from the company.
Market penetration is where the company is the market leader and has the most share of the market. They do this by pushing their existing products into the existing markets. Product development is where they develop new products or modify existing products and put them into existing markets for example, coca cola has coca cola cherry, life, diet and zero. Market development is where they put existing products into new markets in the hope that they will sell, this could be in markets abroad or just different regions. Diversification is where a company will make new products and put them into new markets, this is a massive risk as the company have no idea of the product or of the market it is going into, this is good because it stops the company from being stuck in one market e.g. virgin they have virgin trains, Atlantic, broadband etc.
Their main growth strategy is market penetration, where the company sells as many goods and services to their current target market as possible. They do so by offering discounts, promotions, and special packages tailored for the customers. The other strategies, while important, are not used as often.
Apple can adopt the strategy to portray a picture of a not so conducive less profitable market, which could discourage new entrants from picking that path as they will be demotivated by the low return on investment resulting from low profitability levels. In order for apple to create a niche for t numerous products, it needs to adopt and implement such bold strategies of defense to protect their interests and continue to be profitable and successful (Ideavist, 2011). Entry of a new company into the technology sector would spell doom for most companies already struggling for market share as better priced and reliable products could imply consumers would shift their preference to the new entrant leading to a negative volume of sales stir for most already established companies. Another strategy that could be employed as part of Apple’s defense could be the pre-entry strategies that make it even harder for new entrants to compete and enter into the sector and this involve continuous improvement for their products, covering
The two major ways by which business can grow is know as organic and inorganic growth. When a company grows by increasing the turnover of the existing business, it is said to have grown in an organic manner. In other words, when business grow by acquisition or by joining two or more companies together by the way of merging, takeover and so on, we say that such growth is inorganic. A typical example of inorganic growth is the one that occurs in Microsoft. It is one of the companies that has grown by mergers, takeover and acquisition of over hundred other companies since 1986. Unlike the case of Apple, were growth is by product innovation and development. They have series of product line ups such as iPod, iMac, iPad and many more which give rise to their competitive market share and sales.
Marketing and branding, two of the most common used words in the contemporary world, is closely linked to each other without doubts, but the importance of branding to successful marketing is enquired to measure in term of the question. In fact, various people have different ideas on marketing and branding. For most of people, or customers, the two are normally combined in their minds or even equal to each other. For example, people could raise Apple as the answer for both questions of "what is good branding" and "what is successful marketing". In fact, they are two separate topics on academic, and branding is just one of the numerous marketing activities apparently. However, the perception of consumers might be a good guide to answer the question.
The case looks at prescriptive strategy as applied to multi-product group of companies. Unilever is based in over a hundred countries where multiple products are being made in each. However, the market is mature which means that growth is stagnant and innovation is almost non-existent. In order to improve on growth and sales, the strategies that are needed look at how to come up with new products that have high profit margins and penetrate new markets. The prescriptive approach was used to come with a strategy to improve growth and profit. In order to improve on innovation, both the prescriptive and emergent strategies can be used since both support innovation. From the case study, not much profit was made when the ‘Path to Growth’ strategy was first implemented (2001-2004). The strategy was initially based on cost cutting. There was a need to also build volumes through existing portfolio of branded products through innovation and marketing. By focusing on increasing sales in developing countries where growth prospects were high and increasing investment in personal care products where profit margins were higher, it was possible to improve the profit portfolio.
“The Ansoff Matrix (appendix C) shows four different growth strategies that result by combining existing or new products with existing or new markets: market penetration, market development, product development,and diversification” (Fadaei, 2014).
When Apple saw that the iPhone market was mature and stable, the organization introduced other innovative products to create a new market (Ritson, 2013). This is the philosophy of the planning school of strategy and it is all about engaging an existing market while forecasting the future market.
Growth strategy is the organisation formulating their plan to accomplish their objectives and goals to grow in revenue and size of the business. However according to (Bridge, O’Neill and Cromie 2003), she defines growth strategy as a “...the movement of the business into bigger premises, taking on more staff, significant increases of turnover, taking on a new product line or lines, buying another business, and so on” Growth Strategies are important for businesses as they allow the business to move in a formal direction. Businesses can easily be affected by the smallest of changes for example new customers or the arrival of new competitors which could have a negative impact, so planning is very important and takes care of additional effort and resource for faster growth. With these growth strategies, organisations try to achieve numerous things for example, obtaining economies of scale, attaining market leadership and retaining talented staff.
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public
Branding is also a way to build an important company asset, which is a good reputation. Whether a company has no reputation, or a less than stellar reputation, branding can help change that. Branding can build an expectation about the company services or products, and can encourage the company to maintain that expectation, or exceed them, bringing better products and services to the market place.
The Apple Inc. can use this tool when they want to increase their sales either by expanding product or by entering a new market. With the help of this grid, market expansion strategy is determined.