Answer the following:

1. If the company has 1 million to spend on a new strategy and is considering

market development versus product development, what determining factors
would be most important to consider?
Market development is the process of expanding the reach of existing products
or services into new geographic areas. The factors below show when market
development is a particularly effective strategy:
 New channels of distribution are available that are reliable, inexpensive, and of
good quality.
 An organization is successful at what it does.
 New untapped or unsaturated markets exist.
 An organization has the needed capital and human resources to manage
expanded operations.
 An organization has excess production capacity.
 An organization’s basic industry is rapidly becoming global in scope.

Product development aims to improve sales by upgrading or developing existing

products or services. The following factors, on the other hand, indicate when product
development may be a particularly effective strategy to pursue:
 An organization has successful products that are in the maturity stage of the
product life cycle; the idea here is to attract satisfied customers to try new
(improved) products as a result of their positive experience with the
organization’s present products or services.
 An organization competes in an industry that is characterized by rapid
technological developments.
 Major competitors offer better-quality products at comparable prices.
 An organization competes in a high-growth industry.
 An organization has especially strong research and development capabilities.

2. There is growing trend of increased collaboration among competitors. List the

benefits and drawbacks of this practice.
Nowadays, more strategies that emphasize competitor collaboration are being
adopted. So, both organizations must provide something unique, such as technology,
distribution, basic research, or manufacturing capability, for a collaboration between
competitors to survive and prosper.
Benefits collaboration among competitors:
 Ideally, coopetition is intended to improve the performance of all the rival firms
involved.
 Collaborating with competitors, companies have access to new resources,
capabilities, and opportunities that would not be available to them if they
 competed using their own assets.
 Coopetition can help firms to improve their sales, access new equipment, save
costs through joint promotion, and share knowledge between competing firms.
 Larger businesses can utilize these improvements in their performance and
concentrate their efforts on other opportunities, such as expanding to attract new
customers.
Drawbacks of collaboration among competitors:
 Regardless of any collaboration that occurs between such organizations, they
are still rivals, competing for similar customers.
 Firms have to be very careful to engage in an “optimal-level” of coopetition –
something that could be difficult to achieve in practice.
 They could create tensions, such as conflict and power imbalances with their
competitors because they cannot differentiate between the opposing forces of
cooperativeness and competitiveness.
 When working under cooperative agreements, companies frequently give up too
much information to competitors.

3. Why is it not advisable to pursue too many strategies at once?

It is not advisable because when multiple strategies are pursued at the same time,
organizational resources are dispersed too thin. Every organization has a finite amount of
resources. No company can pursue all of the strategies that could be beneficial. And It is important
not to utilize all strategies at the same time because those strategies require deep focus and
analysis. In the same way, no one can take on an endless amount of debt in order to buy goods
and services. Only a few strategies can be effectively funded, advertised, and managed at the
same time. In addition to being costly, following multiple strategies at the same time makes it
difficult for businesses to project consistency, thoroughness, and attention to customers.