Growth & Expansion:
This refers to an increment in interest rate and market shares.
a)investment growth -increase in the assets or
iii)Floating Equity share(IPO)
iv)Borrowing – Bank financial institutions
b)Market share growth:-the percentage proportion of the industry controlled by a particular firm in relation to competition on the basis of sale turnover.
Market leader Market challenge Follower Nicher
40% 30% 20% 10%
N/B there is direct linear relationship between market share and profit .the higher the market share the higher the profitability .therefore most companies would like to increase their market share.
Strategies for increasing Market shares .
i)Reduce the prices
ii)Improve product quality
iii)Increase advertising/sales promotions
iv)Improve customer care
|Market penetration strategies||Product development strategies|
|Market development strategy||Diversification strategy|
Market penetration strategy .
A strategy of increased market share in which a company sells a new product in an existing market .this can be achieved through:-
a strategy of expanding market share in which a company sells new product to new market.
This strategy is also used by international co-operations by entering foreign market .
This can be achieved by
ii)Licensing & franchising
iv)strategic partnership alliance
vi)merger & acquisition
ix)Direct foreign investments
The Integration strategy
– A strategy used by large organizations to make arrangement and acquisitions or control other company’s in order to reduce cost of raw materials,enhance market asses,spread risks & reduce product or services value in market to achieve economic of scale. The more you produce the lower the cost per unit .
Types of Interrogations
a)Vertical integration: is a type of integration in which a firm integrates within the levels of industry(diff)
b)Horizontal integration:is integration in which a firm integrates within same level horizontally
- c) vertical integration .
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