Intensive Strategies(MEI DUAN FER)

7/29/2019 Intensive Strategies(MEI DUAN FER)

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Intensive Strategies

andDiversification Strategies

Mei

Duan

Jennifer


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Ansoffs model Ansoffs model is one of the best tool which companies to

develop market and product expansion strategies.

Ansoffs model is based upon four type of strategies namelymarket penetration strategy, market development strategy,product development strategy anddiversification strategy. Thestrategy is also dependent on company objectives includeincreasing sales, increasing profit, enter into new market,

develop new product and enter into new business.


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Intensive Strategies

Those three strategies are sometimes referred to as intensivestrategies because they require intensive efforts if a firmscompetitive position with existing products is to improve.

The aim of intensive strategies is to broaden the market share

and to increase the profit by making the existing products moreeffective and by introducing new and various sets of products inorder to increase the market share too.

MarketPenetrationstrategy

MarketDevelopmentstrategy

ProductDevelopmentstrategy
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Market Penetration strategy...

A market-penetration strategy seeks toincrease market share for present productsor services in present markets through

greater marketing efforts.

Market penetration includes increasing thenumber of salespersons, advertisingexpenditures, and publicity efforts oroffering extensive sales promotion items.
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Five guidelines for when marketpenetration is especially effective:

When current markets are not saturated.

When usage rate of current customers could beincreased.

When market shares of major competitors have beendeclining while total industry sales have beenincreasing.

When increased economies of scale provide majoradvantages.
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Market Development strategy...

Developing a new market for the existing company product iscalled market development strategy.This is the process offinding new market for the new customer to increase company

performance by increasing sales and profits. Companies candevelop market on geographical such as city,country,region,stateetc.

ex:

Pakistan State Oil(PSO) developing new market by exporting oil

to Afghanistan. Chinese products developed new market for their product

worldwide.
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Six guidelines for when market developmentmay be an effective strategy

When new channels of distribution are availablethat are reliable, inexpensive, and of good quality.

When an organization is very successful at whatit does.

When new untapped or unsaturated marketsexist. When an organization has the needed capital and

human resources to manage expanded operations.

When an organization has excess productioncapacity. When an organizations basic industry rapidly is

becoming global in scope.


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Product development

Product development is a strategythat seeks increased sales by

improving or modifying presentproducts or services.

Product development strategy...


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Product development usually entails largeresearch and development expenditures.

The best thing about this strategy is youvealready established yourself in your current

markets and you know what your customerswant. You have the distribution channels, andyou know how to reach them.


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Five guidelines for when to useproduct development

a. When an organization has successfulproducts that are in the maturity stageof the product life cycle.

matur

ity


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When an organization competes in

an industry that is characterized by

rapid technological developments.

b.


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When major competitorsoffer better-quality

products at comparableprices.

c.


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d.When an organization competes in a high-growth industry.

e. When an organization has especially strongresearch and development capabilities.


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Diversification Strategies

Diversification Strategy is the development of new products inthe new market. Diversification strategy is adopted by thecompany if the current market is saturated due to whichrevenues and profits are lower. At the corporate level, it isgenerally and its also very interesting entering a promisingbusiness outside of the scope of the existing business unit.
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Diversification Strategiesconcentric diversification

The company come up with a new product thatare similar to its core business/technology fornew group of customers

Example Sonic company which was originallyproducing audio cassettes in Pakistan decidedto come up with tape backup device forcomputer using similar technology


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Diversification Strategies

Horizontal Diversification

Company can come up with product which is

technology unrelated to its current product

line for its current customers

For Example sonic company started making

cassette holding trays


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Conglomerate Diversification

Company decided to come up with product

that is not related to its current technology,

products and markets

For example Sonic decided to manufacture

software's


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THANK YOU

Intensive Strategies(MEI DUAN FER)

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