SUBMITTED TO:

Ma’am Anam Javed

Strategic Marketing
SUBMITTED BY:
1. Muhammad Amjad Waqas
2. Osama
3. Shahzaib Dar
4. Rajab Ali
5. Muhammad Arslan
6. Farhan Ahmed
DATED:
22th October, 2019.

ASSIGNMENT 01
 A Note on Managing the Growing
Venture

Strategy

Will the venture grow via new customer segments, new geographic

markets, or new products and services?

The idea is that each time you move into a new quadrant (horizontally or vertically),

risk increases. The four strategies are:

 Market Penetration: Selling more of the company’s existing products to existing markets. To

penetrate and grow the customer base in the existing market, a company may cut prices, improve its

distribution network, invest more in marketing and increase existing production capacity

 Market Development: Selling more of the company’s existing products to new markets. This

strategy is about reaching new customer segments or expanding internationally by targeting new

geographic areas.

 Product Development: Developing and selling new products to existing markets Product

development means making some modifications in the existing products to give increased value to the

customers for their purchase or developing and launching new products alongside a company’s existing

offering.

 Diversification: Entering new markets with new products that are either related or completely

unrelated to a company’s existing offering. 

 If growth is to be achieved via new customer segments, to what extent is

the business defined in terms that encompass the delivery of results

desired by newly-targeted customers as well as existing ones?

Planning and implementing a growth strategy to develop new markets and expand

your business before your current market flattens out will not only help your business

survive tough times, it could also give you a considerable edge.

 Following are a few things to keep in mind before you get started:

 Target Market is the customer group that you feel will most likely want to buy your products or

services. This group is defined by your customer profile.

 Customer Profile is a detailed profile of your typical customer. For individual consumers, it

includes information such as age, income, gender, marital status, profession and buying habits. For

businesses, it includes the types of business, number of years in business, number of employees, annual

revenues and products or services sold.

 Demographics are the characteristics of a population such as size, growth, age, income, gender,

marital status and buying habits. This information helps you decide whether this target market is large

enough for your products or services in the target area.

 Market Analysis is an analysis of research data that results in determinations about the

marketability of a product or service in the given market.

A systematic approach is the best way to find a new market. Without it, you can waste a lot of precious

resources — something a small business does not have an excess of. The following steps will effectively

and efficiently guide you through the new market development process:

1. Define Your New Target Market(s)

2. Do Your Market Research

3. Decide To Enter This Market Or Look For Another

4. Enter The Target Market

What groups of customers, geographic or technologies are excluded from

new product/market targets, thus providing the basis for market and

operating focus?

In fact, it can help you enlarge your customer base by giving you information with which to successfully

adjust some component of your offering—the offering itself, its price, the way you service and market it.

More specifically, the process can help you do the following:

 Avoid head-on competition with other firms trying to capture the same customers.

 Develop new offerings and expand profitable brands and products lines.

 Remarket older, less-profitable products and brands.

 Identify early adopters.

 Redistribute money and sales efforts to focus on your most profitable customers.

 Retain “at-risk” customers in danger of defecting to your competitors.

What share of the newly-defined growth opportunity must be captured to

achieve: (a) break- even and (b) profit goals?

Break-even analysis entails the calculation and examination of the margin of safety for an entity based

on the revenues collected and associated costs. Analyzing different price levels relating to various levels

of demand a business uses break-even analysis to determine what level of sales are necessary to cover the

company's total fixed costs. A demand-side analysis would give a seller significant insight regarding

selling capabilities.

Business profitability goal determines the amount of revenue you need to generate from your business

to meet your expenses and turn a profit.

Newly-defined growth opportunity must be captured to achieve at least break even point but keeping in

mind the profit goal of the business as well but also to get the fixed cost.

People

Does leadership possess the values, character, and behaviors necessary to

execute the vision for growth?

Strategic leadership refers to a manager’s potential to express a strategic vision for the organization, or a

part of the organization, and to motivate and persuade others to acquire that vision. Strategic leadership

can also be defined as utilizing strategy in the management of employees. It is the potential to influence

organizational members and to execute organizational change. Strategic leaders create organizational

structure, allocate resources and express strategic vision. Strategic leaders work in an ambiguous

environment on very difficult issues that influence and are influenced by occasions and organizations

external to their own.

The main objective of strategic leadership is strategic productivity. Another aim of strategic leadership is

to develop an environment in which employees forecast the organization’s needs in context of their own

job. Strategic leaders encourage the employees in an organization to follow their own ideas. Strategic

leaders make greater use of reward and incentive system for encouraging productive and quality

employees to show much better performance for their organization. Functional strategic leadership is

about inventiveness, perception, and planning to assist an individual in realizing his objectives and goals.

Strategic leadership requires the potential to foresee and comprehend the work environment. It requires

objectivity and potential to look at the broader picture.

Has the organization evolved to facilitate expertise in specific functional

areas?

A "high-performance work team" refers to a group of goal-focused individuals with specialized expertise

and complementary skills that collaborate innovate and produce consistently superior results. The group

relentlessly pursues performance excellence through shared goals, shared leadership, collaboration, open

communication, clear role expectations and group operating rules, early conflict resolution, and a strong

sense of accountability and trust among its members.

 Factors required for a high-performance work team.

 Common stages of team development.

 Causes of team dysfunction.

 Primary types of team’s organizations establish to achieve specific work goals.

Have job responsibilities been clearly defined?

Yes, it has been defined very precisely.

Is the chain of command and degree of individual autonomy clearly

defined?
Yes, it has been defined very precisely.

Opportunity

What’s the total potential for the new product/market opportunities

being targeted as well as the realistic share to which the organization

might aspire?

When a venture is just beginning, it may not encounter much direct competition. But with initial success

and continued growth, competitive responses are inevitable. This may take the form of direct imitation or

strategic leapfrogging or the application of large resources, such as a sales force or financial strength, by a

large company. These competitive challenges require leadership that can think beyond the creation of a

viable business model to how sustainable competitive advantage can be achieved. Whereas the original

business model may have met with success because of its uniqueness, competition will require that the

venture has an underlying and durable competitive advantage.

Similarly, businesses requiring high levels of customer responsiveness and satisfaction need to move

beyond the enthusiasm and dedication of the founding team to a systematic way of hiring and training for

customer service.

For example, when Meg Whitman joined EBay sales were $6 million and customer service was

haphazard at best. Whitman, who previously worked at Proctor & Gamble, Disney, and Hasbro, instituted

powerful systems to institutionalize customer service and by 2004 sales exceeded $3 billion.
What are the major risks of the growth strategy? What could go right?

What could go wrong?

 What could go right?

Possibly the greatest competitive advantage of business growth is the ability to capitalize on

the economies of scale. As you increase your production output, you can bring down costs per unit and

achieve savings across:

 purchasing - by getting discounts for buying in bulk

 marketing - by spreading the cost of promotion over larger sales

 overheads - by spreading the staff or administrative costs across a greater output

Business growth can also enable you to:

 increase your resources and stock

 generate more sales and profits

 reach new customers or markets

 put more money back into your business

 influence market price

 reduce external risks (e.g. from competition, market or technology changes)

 Expansion can also give an impression of greater financial viability of the business. Financial

institutions often see larger businesses as more credible and stable than their smaller competitors.
Are competitors likely to respond to the venture’s initial success?

The following criteria can be used to choose companies that would be used in your competitive business

analysis and in these factors a competitors must likely to respond.

 Same target markets - Competitors that participate in one or more of the current or envisioned

target markets for the business

 Product & service strategy similarity - Businesses that have a similar product and/or service

strategy or offer a similar portfolio of products and services

 Common core competencies - Companies whose management team, founders, key players or

advisors have core competencies in common with your business. This can include technology,

management, process, ...

 Comparable business processes - Firms that appear to have comparable underlying business

processes

 Similar business vision - Ventures that have a similar vision for the future at a business unit

level

 Relevant intellectual property - Competitors who have intellectual property that could be used

to limit your market opportunities

 Capitalization strength - Corporations with strength in financial capitalization that could enter

your target market

 Brand similarity - Companies who appear on the surface to have a similar brand identity

 Organization maturity- Organization's level of maturity to serve customers in planned target

markets. This includes maturity in distribution, sales, channels, quality, customer relationships, ...

 Participates in relevant industry groups - Firms who are actively participating in relevant

industry groups that serve your target market.

What scale needs to be achieved for the venture to sustain success?

Following Scales need to be achieved for the venture to sustain success:

 Build a solid foundation

 Focus on scalable business solutions

 Embrace strategic planning

 Focus on your core strengths

 Be patient

How can high levels of customer responsiveness be maintained?

Measure your company's customer service efforts regularly. Send out

questionnaires and surveys to customers concerning recent transactions. Set

aside time to read survey results. Make a list of recurring customer service

issues, if any.

Schedule monthly or bi-monthly customer service seminars for employees.

Address customer service issues that need improvement. Create a rewards

program to motivate employees to improve their interactions with customers.

Review your customer service plan on a regular basis. Compare your written

goals to responses from customers and to employee performance. Readjust

goals, as necessary, writing down what you hope to accomplish by the next

review.
Context

Have there been any changes in the macro-economy, tax laws, regulation,

or socio-political environment that could affect the venture’s ability to

grow?

By influencing incentives, taxes can affect both supply and demand factors.

Reducing marginal tax rates on wages and salaries, for example, can induce

people to work more. Expanding the earned income tax credit can bring more

low-skilled workers into the labor force. Lower marginal tax rates on the

returns to assets (such as interest, dividends, and capital gains) can encourage

saving. Reducing marginal tax rates on business income can cause some

companies to invest domestically rather than abroad. Tax breaks for research

can encourage the creation of new ideas that spill over to help the broader

economy, And so on.

Social factors—our attitudes, values, ethics, and lifestyles—influence what,

how, where, and when people purchase products or services. They are difficult

to predict, define, and measure because they can be very subjective. They also

change as people move through different life stages. People of all ages have a

broader range of interests, defying traditional consumer profiles. They also

experience a “poverty of time” and seek ways to gain more control over their

time. Changing roles have brought more women into the workforce. This

development is increasing family incomes, heightening demand for time-

saving goods and services, changing family shopping patterns, and impacting
individuals’ ability to achieve a work-life balance.

The political climate of a country is another critical factor for managers to

consider in day-to-day business operations. The amount of government

activity, the types of laws it passes, and the general political stability of a

government are three components of political climate. For example, a

multinational company such as General Electric will evaluate the political

climate of a country before deciding to locate a plant there. Is the government

stable, or might a coup disrupt the country? How restrictive are the regulations

for foreign businesses, including foreign ownership of business property and

taxation? Import tariffs, quotas, and export restrictions also must be taken into

account

Is the context for target growth opportunities different than that for

markets in which the organization has been competing to date?

Just as the original venture idea existed in a context, so does the opportunity to

grow the venture. Sometimes the context can change to increase the size of an

opportunity. For example, changes in the tax laws tend to increase the demand for

tax services. On the other hand, tougher regulatory enforcement by governmental

agencies such as the FDA can limit the opportunity of new healthcare ventures to

grow.
Deal

Is the free cash flow sufficient to fund the desired rate of growth as well

as investment in innovation? If not, does the organization have sufficient

access to capital markets and the capital structure to obtain funding

needed to support the desired rate of growth?

A venture’s growth phase nearly always requires considerable capital. On the one

hand, it is easier to attract capital now that the venture has demonstrated early

success. On the other hand, the larger amounts of capital needed as well as

sensitivity to dilution still make it challenging to find enough capital on the right

terms.

Unlike in the start-up phase, growing ventures have additional sources of capital

available to them. Having established initial success, it is more likely that a larger

company would want to acquire the venture. This alternative assures ample

capital for growth, but represents a considerable loss of control. Another

alternative is to borrow funds from lending institutions. This option is rarely

available to a start-up, but may now be available and has the advantage of creating

no dilution of ownership position. Finally, sometimes rapidly growing ventures

also have the option of going public. This can bring in substantial capital from

dispersed shareholders who would be less able to exert much control.

Does management track the rate of growth in enterprise value in relation

to the perceived level (among investors) of prospective growth

opportunities?

Investment and valuation professionals review all of the following areas of a

company: planning, leadership, sales, marketing, people, operations, Nance

and legal. Some investment models take these eight broad categories and

break them down into multiple sub categories. All these categories contain

elements of risk-every one of which can be benchmarked against a set of

private company best practices. Some are solely under the control of the

owner, and some are not. It’s this benchmarking process that connects the risk

profile to valuation and investment quality. While there are several ways to

establish the value of a privately held business, professional investors and

buyers will assign the level of perceived risk to the cost of capital (discount

rate) in a projected Discounted Cash Flow (DCF) and terminal value analysis.

The higher the risk in the business, the greater the cost of capital or discount

rate will be.

Is an effort made to identify points at which a change in ownership would

be advisable?

No, entrepreneur never gives or shifts his ownership to others.

Execution

Have key processes, especially for dealing with customer interactions,

been defined?

Yes.

Are systems and measures in place to evaluate departmental and

individual performance?

Yes.

Are all individuals aware of their key performance metrics and how they

relate to the overall goals of the organization?

Yes.

Are critical tasks being accomplished?

Yes.

Is the decision process fast and thorough?

No.

Is the entire management team able to translate the company’s objectives

into specific accomplishments and action plans?

Yes.