9.1 Corporate Strategies

Essential idea:

Companies and businesses can utilize a range of different strategies to develop products, services and systems.

Nature and Aims of Design

Nature of Design

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. (1.12)


Aims

Aim 5: The designer must consider the ethical implications of imitating the products of others and their implications on a cultural, economic, and intellectual property level.

Guidance

As DP Design Technology student you should:

Concepts and Principles

Corporate Strategies

Pioneering Strategies

A pioneering strategy is one that unique or vastly different from others in the market. It makes use of new technologies, materials, or production processes to develop a product.

This type of strategy is risky in that a new product is being introduced to the market, making it difficult to predict how successful it will be. However, it has the potential for large gains as it is the only product. 


The Dyson DC01 took an everyday, burdensome object and made it modern and stylish. The innovative technology, design, and performance set it apart from other competitors in the marketplace.

A successful pioneering strategy is dependent on:

In-depth market and consumer research can reduce some of the risk associated with pioneering strategies - the better the designer understands the market, the better they can design to its needs.

The first smartphone, it defined and dominated the product category.

Imitative Strategies

An imitative product strategy focuses on analyzing existing products in the market and developing something very similar. This approach makes use of similar materials, technologies, and production methods to produce a similar product. The advantage of this strategy is R&D costs and development time are reduced. 

In some cases, a manufacturer may choose to substitute cheaper methods, materials or technologies. This may result in poorer performance, durability, build quality, or aesthetic experiences

More controversially, imitators may infringe illegally on the patents and registered design. This can lead to costly and length court cases.

examples

Dyson DC02 (left) and Vax Air (right); Description of court case brought by Dyson agains manufacturer Vax.

Hybrid Strategy

A hybrid strategy makes use of both pioneering and imitative strategies. A company may implement a hybrid strategy because they have identified that it will allow them to do maximize profit and/or sales; allow for shortened development time; and reduce spending on R&D.

Reverse Engineering

This is the process of extracting knowledge or information about a design by disassembling it. This is a common practice of imitative manufacturers. By disassembling the product, they can determine the materials, parts, and processes used in its manufacture.

The website iFixIt’s “Product Teardowns” are also a type of reverse engineering in that they disassemble a product in order to understand how easy it is to repair and or maintain. iFitIt’s stated goal in this is to empower consumers to repair their own products and perform after warrantee repairs. Often, manufacturers do not make this information readily available to consumers. iFixIt, however, uses product teardown to publish repair manuals and online guides for users. 


Image Source: iFixIt

Market and Product Growth Strategies

Companies may select different types to strategies depending on the type of market they are entering. By considering the type of market, the appropriate strategy and approach to product development can be selected. 

Ansoff Matrix of 4 growth strategies

The Ansoff Matrix is a method for organizing strategies and identifying opportunities to grow a product.

Market Penetration

Market Penetration focus on increasing sales to existing customers, or identifying new customers for an existing product. This is a low risk strategy because an existing product is being sold in an existing market.

Strategies to develop market penetration include:


Product Development

Product development is the selling of new products in an existing market. This medium risk strategy is usually applied in a changing market, or when a product has reached maturity or decline. Typically, the new product has slight modifications, features, or enhancements compared to the existing products. This makes it more desirable to the existing customers. Some strategies include:

Offering variations of a product in different flavors, sizes, or levels of performance. 

Offering the base product with a new or improved feature;

Market Development

Market development of new markets for an existing products. It typically targets consumers in a different market segment who are not buying the company’s product.

Strategies: Researching into new market segments. 

Examples: products developed in one market and used in another


Product Diversification

Product diversification is the creation of new products for new markets. This high risk strategy is usually undertaken by large companies because they can spread the risk across the product line.


Corporate Social Responsibility (CSR)

Corporate Social Responsibility is a form of self-regulation for a company and is centered around the development of goals related to three areas: Economic, Social, and Environmental. CSR is a form of self-regulation in that it is sole up to the company to determine the type and scope of actions it takes in these areas. The concepts are strongly related to those that underpin Triple Bottom Line (TBL). 

CSR is incorporated by a company as part of its objects, and can serve to create a positive impression of the company with consumers. 

CSR is criticized for distracting consumers from the negative impact of a company’s business practices.

Related concepts