Insight to Product-Market Expansion
Surviving and growing amidst the pressure of rival companies has been a struggle for most companies. Therefore, in the process of business formation in Dubai companies may devise strategies to place themselves in a unique position and avoid being battered by intense competition. Then again on the other hand, competition is the factor which drives one to keep doing better and surpass others in the industry. One may have started with a certain plan and capacity at the initiation of one’s company, nevertheless, with the dynamism of the environment, a company will adapt and change. When the needs and requirements of customers constantly evolve, opportunities to expand shall be taken and the company either furthered through the product or the market.
Market Penetration: On certain occasions, one may not want to change the product, nor tap into new markets, but increase the customer base in the existing market. Growth could be energized by the sale of an amplified number of products to existing customers or new customers. Delving deep into the market would thereby boost revenue and enhance the capacity of the company. However, as markets saturate, the viability of market penetration as a growth strategy diminishes giving way to other forms of strategies.
Product Development: This is where new products are brought into the market. Products could be modified or value-adding products may be introduced as an addition to the existing range. It includes the conceptualization, design, development, and marketing of newly created or newly rebranded goods or services. The objective of product development is to cultivate, maintain and increase a company's market share by satisfying consumer demand.
Market Development: When a company has a very strong and established product line, it provides the opportunity to tap into new market segments. New users can be found in new geographic segments, new demographic segments, new institutional segments or new psychographic segments. If the new market is attractive and if the company can maintain the current level of competitive advantage, growth may be achieved by leveraging product knowledge to reach new customers. Diversification: This is the infusion of new markets and new products. This is the ultimate step that may be taken to carry forward a company to the next level. It may be a huge leap and involves research and innovation to pass the test of feasibility. Diversification may balance the risk factor and may provide stability and less reliability on one industry or market alone.
Expanding a company using any of the above strategies would make sense only if sufficient market research and analysis is conducted. Along with paying attention to changing regulations, socio-political aspects and other external factors that may trigger decisions to expand either positively or negatively. To expand the range of products for any company, a complete feasibility and sustainability study may be done previous to any further investments to avoid any miscalculations.