Strategy 6 Growth Strategies

1 Entering a New Market Assessment

2 Industry Analysis Is the industry growing?
3 Mergers & Acquisitions How are we growing compared to the industry?
4 New Product Are our prices relative to competitors'?
5 Pricing Strategies What are our competitors marketing and development strategies?
6 Growth Strategies Which segments have the most potential?
7 New Business Funding for higher growth
8 Competitive Response Strategies
Operations Increase distribution channels
9 Increasing Sales Increase product line
10 Reducing Costs Invest in major marketing campaign
11 Increasing Profits Diversify products or services offered
12 Turnaround
7 New Business
1 Entering a New Market Market
Market Who is the competition? What is their market share?
Competition Products comparison
Market share Barriers to entry
Comparative products and services Cost Benefit Analysis
Barriers to entry Management
Entry Marketing and strategic plan
Start from scratch Distribution channels
Acquire an existing player Product
Form a joint venture/strategic alliance with existing player Customers
Finance
2 Industry Analysis
Current Industry Structure 8 Competitive Response
Life cycle (growth, transition, maturity) Why?
Performance, margins New product?
Major players and market share Competitor's strategy changed?
Industry changes (new players, new technology) Other competitors' increased market share
Drivers (brand, size, technology) Strategy
Suppliers Acquire a competitor
How many? Merge with competition
Product availability? Copy competitor
What's going on in their market? Hire the competitor's management
Future Increase profile with marketing campaign
Expanding or shrinking?
Mergers and acquisitions? 9 Increasing Sales
Barriers to entry or exit? Assessment (increasing sales doesn't necessarily mean increasing profits)
Growth relative to market share
3 Mergers & Acquisitions Changes in market share
Objectives Customer polls
Increase market access Prices competitive?
Diversify holdings Competitor's strategies (marketing and product development)
Pre-empt the competition How?
Enjoy tax advantages Increase volume
Incorporate synergies Increase amount of each sale
Increase shareholder value Increase prices
Price Create seasonal balance
Fair? Affordable?
How to pay? 10 Reducing Costs
If the economy sours...? Assessment
Due Diligence Get cost breakdown
What shape is the company in? The industry? Investigate for irregularities
How secure are its markets and customers? Benchmark competitors
What are the margins? Consider labor-saving technologies
What is the best competitive response to acquisition? Cast analysis — internal
What are the legal issues Union wages, suppliers, materials, economies of scale, increased support system
Exit Strategies Cost analysis — External
How long to keep it? Economy, interest rates, government regulations, transportation/shipping strikes
Divest parts of the organization?
11 Increasing Profits
4 New Product Revenue E (P = R-C) M Always look at external factors first.
Product Identification of revenue streams?
Special or proprietary? Percentage of total revenue of each?
Financing? Unusual balance?
Patented? Have percentages changed?
Substitutions? Costs
Advantages and disadvantages? ID fixed costs
Place in product line? ID variable costs
Cannibalizing our own products? Shifts in costs
Replacing ousting product? Unusual costs
Market Strategy Benchmark competitors
Expansion of customer base Reduce costs without damaging revenue streams
Prompts to competitive response Volume
Barriers to entry Expand into new areas
Major players and market share Increase sales (volume and force)
Customers Increase marketing
Who? Reduce prices
How to reach them? Improve customer service
Retention — how to hold them?
Financing 12 Turnaround
How funded? Strategy
Best allocation of funds? Learn about company
Debt viable? Review services, products, finances
Secure funding
5 Pricing Strategies Review talent and culture
Pricing Determine short term / long term goals
Company objective Write a business plan
Competitive pricing Reassure clients, suppliers, distributors
Cost-based pricing Prioritize goals and develop some small successes for momentum
Price-based costing