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Conceptual Understanding: The success of a company relies heavily on the strategies it adopts. The evaluation of products, services and systems can inform the selection of the most appropriate strategies to follow that will enable a company to achieve its objectives.
Strategies
Pioneering strategy: Being the first to market with a new innovation.
Pioneering means being ahead of the competitors by introducing a new product or innovation into the market first.
Risky
Untested market
Reap the rewards
Capture the innovators
Expensive R&D
It's a long vid, apologies., but it does compare Pioneering and Following (Imitating)
Imitative strategy : Developing products that are similar to an existing new product.
The imitative strategy aims to develop a product similar to the “pioneered” product (an existing new product) as quickly as possible. It takes advantage of R&D invested by others, and is less risky, but is based on a strong development capability.
Less risky
Market already tested
Learn from others
Not the original
R&D not a real issue
Hybrid approaches
There are many benefits for a company using a hybrid strategy. Companies that use a mixture of pioneering, imitative strategies or any of others listed below in order to:
maximise profit and sales
provides for a quick turn around
reduces R&D spending
reduces the risk of employing only a pioneering strategy
Marketing Strategies
The Ansoff Matrix
(not in the guide but aids understanding of the framework for marketing)
Market penetration
Increasing sales to existing customers for an existing product.
Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.
Market penetration seeks to achieve four main objectives:
Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
Secure dominance of growth markets
Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors
Increase usage by existing customers – for example by introducing loyalty schemes
A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.
Product development
The creation of new (to the firm), modified or updated products aimed mainly at a company’s existing customers.
Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.
A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on:
Research & development and innovation
Detailed insights into customer needs (and how they change)
Being first to market
Market development
Finding new applications for existing products, thereby opening up new markets.
Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.
There are many possible ways of approaching this strategy, including:
New geographical markets; for example exporting the product to a new country
New product dimensions or packaging: for example
New distribution channels (e.g. moving from selling via retail to selling using e-commerce and mail order)
Different pricing policies to attract different customers or create new market segments
Market development is a more risky strategy than market penetration because of the targeting of new markets.
Product diversification
Increasing sales by introducing new products in a new market
Diversification is the name given to the growth strategy where a business markets new products in new markets.
This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience.
For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding.
Corporate Strategies
Corporate social responsibility is a form of self-regulation for a company that centres around the development of goals related to three areas:
economic
social
environmental.
Refers to a company's approach for the future. Often involves an assessment of the current situation and mapping of the policies and procedures to achieve predetermined goals where the goals may be long term or short term, production-based, environmental, financial or competition.
The designer/company needs to consider the ethical implications of imitating the products of others and their implications on cultural, economic, and intellectual property level. Examples include use of Leather/ fur, Animal testing (body shop/cosmetics), Labour camps/Sweat jobs, Fair Trade, etc.
Companies that consider corporate social responsibility as a goal need to assess the impact of their operations in relation to these three areas in order to maximise the benefits and minimise the disadvantages.
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