organic growth strategy presentation

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task organic growth strategy presentation

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due date: apr 20, 2014 23:59:59 max points: 150

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scenario: you work for the marketing department of a facility maintenance company (mechanical and janitorial maintenance).the company is a national enterprise and is only engaged in office-building and school-building maintenance. using the organization growth strategies model (figure 7.1 in text), describe how you would implement an organic growth strategy for this service organization.
submit the plan in a 10-12 slide powerpoint presentation including a title slide and reference slide, with a brief explanation of each bullet point included in the "notes."
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when developing new products, the first question must be, in how many ways can a product
be new? authors c. merle crawford and anthony dibenedetto have developed a useful
definition of new products based on the following categories.4
1. new-to-the-world products. products that are inventions and create a whole new market. for example, sony walkman, polaroid camera, the palm pilot, the laser printer, in-line skates.
2. new-to-the-firm products. products that take the firm into a category new to it but not to the world. examples are canon’s laser printer, at&t’s universal credit card, hallmark gift items, p&g’s first shampoo.
3. additions to existing product lines. these are products that extend existing product lines to current markets such as bud light, apple’s imac and tide’s liquid detergent.
4. improvements and revisions of existing products. these are current products that are made better. virtually every product on the market has been improved, often many times.
5. repositionings. products that are retargeted for a new use or application. arm & hammer baking soda is a classic example, being repositioned as a drain deodorant, refrigerator freshener, toothpaste, deodorant, and so on. aspirin has been repositioned as a safeguard against heart attacks.
6. cost reductions. these are new products that simply replace existing products in a line, providing the customer similar performance but at a lower cost.
the new product categories listed above raise the issue of imitation products, strictly me-too or improved versions of existing products. if a firm introduces a form of dry beer that is new to them but is identical or similar to other beers on the market, is it a new product? the answer is yes, because it is new to the firm. managers should not get the idea that to imitate is bad and to innovate is good, for most of the best-selling products on the market today are improvements over another company’s original invention. the best strategy is the one that will maximize company
goals. it should be noted that crawford and dibenedetto’s categories don’t encompass variations such as new to a country, new channel of distribution, packaging improvement, and different resources or method of manufacture, which they consider to be variations of the six categories, especially as these variations relate to additions to product lines.
a second broader approach to the new product question is the one developed by h. igor ansoff in the form of growth vectors.5 this is the matrix first introduced in chapter 1 that indicates the direction in which the organization is moving with respect to its current products
and markets. it is shown again in figure 7.1.
market penetration denotes a growth direction through the increase in market share for present product markets. product development refers to creating new products to replace existing ones. firms using either market penetration or product development strategies are attempting to capitalize on existing markets and combat competitive entry and/or further market incursions. market development refers to finding new customers for existing
products. diversification refers to developing new products and cultivating new markets. firms using market development and diversification strategies are seeking to establish footholds in new markets or preempt competition in emerging market segments.
as shown in figure 7.1, market penetration and market development strategies use present products. a goal of these types of strategies is to either increase frequency of consumption or increase the number of customers using the firm’s product(s). a strategic focus is placed on altering the breadth and depth of the firm’s existing product lines. product development and diversification can be characterized as product mix strategies. new products, as defined in the growth vector matrix, usually require the firm to make significant investments in research and development and may require major changes in its organizational structure. firms are not confined to pursuing a single direction. for example, miller brewing co. has decided four key strategies should dictate its activities for the next decade, including (1) building its premium-brand franchises through investment spending, (2) continuing to develop value-added new products with clear consumer benefits, (3) leveraging local markets to build its brand franchise, and (4) building business globally.6 success for miller dependson pursuing strategies that encompass all areas of the growth vector matrix.
it has already been stated that new products are the lifeblood of successful business firms. thus, the critical product policy question is not whether to develop new products but in what direction to move. one way of dealing with this problem is to formulate standards or norms that new products must meet if they are to be considered candidates for launching. in other words, as part of its new product policy, management must ask itself the basic question, what is the potential contribution of each anticipated new product to the company?
each company must answer this question in accordance with its long-term goals, corporate mission, resources, and so forth. unfortunately, some of the reasons commonly given to justify the launching of new products are so general that they become meaningless. phrases such as additional profits, increased growth, or cyclical stability must be translated into more specific objectives. for example, one objective may be to reduce manufacturing overhead costs by using plant capacity better. this may be accomplished by using the new product as an off-season filler. naturally, the new product proposal would also have to include production and accounting data to back up this cost argument.
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