When a company strays from its core competencies, it can benefit or damage a company. Changing the capabilities of a product to improve it and staying one step ahead of the competitors. When doing this and customers accept it, this usually means a huge profit line. Now, when marketing these changes, the company must avoid a marketing myopia. The failure is to recognize core competency of its business. The growth of the company must focus on the customers and the value they have placed on a product. By focusing on the improvement of the product and not the value marketing myopia can set in and damage the core competencies.
The company has recently decided to expand its product line to include a product that is a deviation from our traditional offerings. The expansion presents two potential outcomes. Outcome one has a potential for profit, incremental growth, and additional market share for the company. Outcome two has a potential for financial loss, reputation or brand damage and reduced market share.
• Also, there is a potential lack of interest in the area of product offering. The company needs to go in for new product development and product modification to cope up with the competition.
Several key points are presented in the article for how companies can be successful. The first, is that companies must be innovative and be willing “to change their core products or business models” (Bertolini et al., 2015, p. 90) to keep up with the change in the marketplace. This may require that they rebrand their product, or change their business
Due to the losses that the business has experienced in the past 3 years, it is critical to take action and define a new way to approach the market in order to make the company profitable again. That’s why it’s necessary to adapt the business by adding a new concept focusing on a different target without setting aside the current and loyal costumers.
Although the brand is among the leaders within this segment, it has lost its position in the overall market due to the emergence of low-cost competitors and a change in its target customer base. Lacking financial and human resources, the brand has not been able
n. Is the firm’s brand or unique selling proposition a sustainable competitive advantage (i.e. can it be copied by the competitors or new entrants)?
Today, many brands produce a variety of products that are unrelated to the company name. Thus, they must be innovative when naming their products and company. A name must be appealing to the customer and distinctive enough to stand out in their mind. However, companies should avoid over extending a product line. When they begin to expand their product lines, they will fail if they keep the same name for every new product.
• Continue to follow the family branding line extension strategy in order to introduce new products such as skin care, soaps, mouthwashes, lotions, and antacids in order to gain increased market exposure and economies of scale. Recent launches of products such as chewing gum with baking soda are testing this strategy.
The positioning strategy should be driven by the market, rather than by the ambitions of the product champions. The source of the problem is failure to understand how consumers' value product attributes. In all, over-appreciating a breakthrough or new technology that
Identifying influencing factors of a company’s macro-environment helps in the strategic development and management within a company. The macro-environment outlines an industry and the competitive environment as seen in figure 3.1, (Gamble, Peteraf, Thompson, 39). Within the macro-environment there are the political factors, economic conditions, sociocultural forces, technological factors, environment forces, and legal/regulatory factors. All of these factors blanket the habitat an industry and its competition thrive in. Inside the industry and competitive environment there are five factors that influence an individual company. The five factors are suppliers, rival firms, new entrants, buyers, and substitute products. The biggest impact on a company are these five factors. For example, Under Armour focuses on their industry and competitive environment to survive and grow. Their strategy to win over the market share from Nike and Adidas consists of expanding a stable and original brand within record time, taking an innovative approach to their product line-up and brand-name appeal where the market seemed to be barren, and lastly, the company enters in the foreign market early on to establish its brand and influence markets outside of the US.
In response to the potential looming problems posed by the division of a host of brand names, the managerial team recommend the following:
Each new line extension needs to have a strategic plan for distribution and sales. Companies must remember that just because they have created a new product does not guarantee that all stores will be inclined to carry this product. There may be fifty types of the same product but store shelves have only been allotted for a possible twenty. Line extensions do not always increase the category demand, and the profits gained from line extensions are normally short-lived. Quelch and Kenny (1994) states “ Line extension proliferation spreads sales across more items, reducing retailers’ average turnover rate, and putting previously profitable SKUs at risk”.
Study the area first before going to expansion of products or product line. It will increase chance to innovate and make products for new market therefore adding profits. Introduction of new products can provide customers with the highest product quality in terms of taste, experience, and satisfaction, thus appealing to attract new customers and making loyal customers that can generate more revenues or profits.