Page 121 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 7: Corporate Level Strategies

2. Market Development: Market development seeks to increase market share by selling the Notes
present products in new markets. This can be achieved through the following approaches:
(a) By entering new geographic markets: A company, which has been confined to some part
of a country, may expand to other parts and foreign markets. Thus, market
development can be achieved through:

(i) Regional expansion
(ii) National expansion
(iii) International expansion

Example: Nirma, which was confined to local markets or some parts of the country in
the beginning, later expanded to the regional market and then to the national market.

(b) By entering new market segments: This can be achieved through:
(i) Developing product versions to appeal to other segments
(ii) Entering other channels of distribution
(iii) Advertising in other media

Example: Hindustan Lever entered the low price detergent segment by introducing a
low-priced detergent called “Wheel” to compete with “Nirma”. This strategy will be effective
when:
(i) New untapped or unsaturated markets exist

(ii) New channels of distribution are available
(iii) The firm has excess production capacity
(iv) The firm’s industry is becoming rapidly global

(v) The firm has resources for expanded operations
3. Product Development: Product development seeks to increase the market share by
developing new or improved products for present markets.

This can be achieved through:
(a) Developing new product features
(b) Developing quality variations
(c) Developing additional models and sizes (product proliferation)

Example: Hindustan Lever keeps on adding new brands or improved versions of
consumer products from time to time to maintain its market share. This strategy will be effective
when:
(a) The firm’s products are in maturity stage

(b) The firm witnesses one of the rapid technological developments in the industry
(c) The firm is in a high growth industry
(d) Competitors bring out improved quality products from time to time
(e) The firm has strong R&D capabilities.

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