Modernization is another internal growth strategy. Market Penetration means that the company tries to grow by selling more of the same products to the existing customers. It aims to increase the sales profit and capture larger market shares (Sabharwal, n.d.). This can be done by attracting customers away from competitors and looking for potential customers to purchase the existing products (Kasi, 2009). The risks are low for this strategy because there is nothing new and unknown.
Consumer satisfaction is important because it provides marketers and business owners with a metric that they can use to manage and improve their businesses. Hence increase in prices damages the already established consumer satisfaction. Harris, L. and Gurel, E., (1986) If the business would go for the argument of reducing prices of its products, the good effects will include; Increased sales volume. The law of demand and supply states that demand increase as prices decrease. The business will witness higher sales volume as the reduced prices will attract more customers to its products.
158). It is expected that a corporate-level strategy will help the firm earn above-average returns by creating value. The corporate level strategies that are used by Seprod are vertical integration and diversification. Diversification is where a company grows into new business areas either similar to existing business or different from existing business allowing a firm to create value by creatively using excess resources. Seprod operates in a number of different and distinctive product markets and several businesses using corporate-level strategy.
According to Porter’s article, revolution on information technology (IT) affects competition by changing the alignment of the industry and rules of competition. This makes competitive advantage in ways for companies to exceed their competitors and bring businesses in place. IT spread all through the value chain, which are activities performed in business at a low cost, and helped perform optimization functions for companies. This allowed the capture of information that wasn’t accessible before. The value chain are activities that have physical and information processing components.
If the market is working then there is a stability between what the sellers are willing to sell and what the buyers are willing to buy. By improving the product many companies can outsource their product to another company and they can offer a discounts, or a lower cost to make their product. By selling your products at a lower cost can help with demand
As our low prices slowly start to bring in consumers, we can slowly implement higher sales prices due to customer demand. We understand that when opening up a company (one) can expect to just break even or take a loss until business picks up, and having low prices might drive you out of business. However we feel that it is a great idea to slowly break into the market by offering affordable prices that will gain support and trust of our customers. Though our prices will be low, this pricing strategy will increase efficiency. It will create cost control and cost reduction pressures from the start, leading to greater productivity.
Increasing the sales In these sales-oriented pricing objectives, knowledge gained from experience curve is put to some good use in predicting a strategy that's capable of decreasing long-term costs while ensuring a long-run profit, by increasing the number of units sold. For this purpose, companies may alter the prices or even whole pricing policies to improve their chances of getting a greater number of sales. Furthermore, brands can use the objective for the purpose of increasing the market shares also, which is a measure of the sales comparison with another brand's or in the whole industry. Aside from achieving a definite target of market share, companies can also use pricing to boost up their shares. Since, greater the price (to an appropriate level), greater are the chances to a larger proportion.
There are many reasons why BLR plc’s board have decided to grow including the opportunity to increase profit and revenue. The company have decided to achieve their growth non-organically through an acquisition which is a risky strategy. This will require a well structured business plan. Unlike a merger where organisations agree to combine their strategic objectives, an acquisition is where one company acquires another and takes control. The horizontal integration would achieve a better place in the market offering more products and services to the company’s existing customers and even potential clients.
It allows reduced costs by maximizing production known product lines, allowing to expand into different markets gives a more competitive edge and expanding to new technology helps to increase to a bigger company, having more political edge within trade agreements. 5. Business is business and every firm has to find ways to produce and market its goods. Why, then, might managers be unable to successfully apply the techniques and concepts they have learned in