Custom Growth Management essay paper sample
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The organization I have chosen is ABC, a vehicle production company in the US that wants to introduce a new hybrid car into the market. The company has been involved in the production of vehicles that use fossil fuel but has seen its market share shrinking due to the high price of oil. It has decided to introduce a hybrid car that uses both fuel and electricity to target environmentally conscious consumers and consumers looking for a car that is cheap to operate. A hybrid car is cheap because it does not depend on fossil fuel.
In the competitive global market the goal of any business is to identify a unique competitive advantage through the use of its core competencies. This refers to the basic technical know-how that the company has. ABC operates in a difficult and turbulent market. Therefore the company management should create a competitive edge using the company core competencies with the resources available against the tough environment. Through these the company will be seeking a long-term competitive advantage. Since competition has gone a level higher in both the domestic and global markets the effective management of products is essential in order to satisfy the needs of consumers. This requires an analysis of the internal and external factors that influence ABC’S operations.
Committed and Skilled management
Can serve from existing locations
Customer lists not tasted
Might miss on sales because of under capacity
High fuel prices have seen the demand for hybrid increase
Could sell to oversee markets
Urban youth market
Likely imitation by competition
Product recall has been a big issue
Based on the SWOT analysis, the new hybrid car is on its way to become a car of choice in the market. Due to increasing high cost of fuel, the demand for high breed cars is expected to shoot up. Opportunities exist for the product oversees. For instance, the new product is unique and can help the company enter new markets such as China and Europe. However, the road to the top will not be an easy one as there are many obstacles to be overcome. The new product, irrespective of its potential to become great has some obstacles that must be overcome. Customer’s preferences have been determined. In case he demand is high, the company might miss sales due to under capacity. The threat of imitation is also very high, which might affect forecasted earnings. However the opportunities and strengths outnumber the perceived negativities.
At the moment there is need for increased investment so as to embrace new technologies for meeting the political, environmental and society needs.
The motor industry has been forced into a tight political, social and economic corner. This in part is related to flat demand and the creation of wide range of vehicles that buyers care very little about. Many emerging countries are keen to develop a motor sector although politicians in developed nations are keen to protect theirs. The new vehicle must be aligned with government legislations that put pressure to reduce carbon dioxide emissions.
ABC has been a symbol of economic growth in many countries. Without the company it is impossible to have an efficient steel, plastic and glass industry. However the company now suffers from structural problems. It has lost a lot in both the capital and financial sector because of reduced profits and flat sales. The small car segment means that the company achieves low margins as a result of low prices.
The motor industry affects the society as a whole. It has many people working in it either directly or indirectly. It is expected that the new product will bring about increased mobility and changing people’s life. Moreover the new car will help people move long distances easily.
The company has a high expertise working to produce a high quality car. This level of knowledge and talent is increasing and creates a new investment demands, new risks and uncertainties. Thousands of vehicles are produced every week using cutting edge technology. But there is potential to exploit intellectual capabilities through alternative technologies.
In recognizing these essential elements of the external environment the company will be able to adjust its internal structure to meet the demands identified in the PEST analysis. The entrance of the new hybrid car into the global arena tends to heighten its potential to become a car of choice. However the external environment is a bit tricky and calls for continuous surveillance.
The Ansoff Growth Matrix is an important tool that helps businesses decides their product and market growth strategy. The matrix suggests that business’ attempt to grow depends on whether it markets new or existing products in new or existing markets.
- Increase sales in the domestic market by 10% in the current year
- To enter foreign market i.e China
4. Strategies to achieve the marketing objectives
- Introducing the new product to the current market—this is because it will increase sales in the current market
- Increased TV advertising— To reach a high number of targets
- A joint venture will be helpful in venturing to new markets because of costs of setting new plants are normally high
- ABC will use a pricing mechanism that will give it a competitive edge over its competitors in China.