Question
Asked Jan 30, 2020
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If a company has $1 million to spend on a new strategy and is considering market development versus product development, what are the determining factors that would be most important to consider? Distinguish the two types of development. 

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Expert Answer

Step 1: Market development strategy

A market development strategy is a business strategy where a company introduces a product and its offerings to markets that the company is not serving before. A market development strategy can be implemented through direct investment, joint ventures, exportation licensing and others.

Step 2: Product development strategy

A product development strategy is a business strategy where a firm creates new offerings in the existing markets through product innovation, product line extensions, and product augmentation. This is possible when the firm looks to research and identify innovative and creative product solutions.

Step 3: Situation under which a market development strategy is better
  • There are new channels of distribution available, which are inexpensive and of good quality.
  • When there are new and untapped markets.
  • The organization has the required capital and human resources to implement...

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