Question

Question 6 (Corporate Strategy & Development): You are consulting to a growing company with a profitable South African business based off its core product. It faces the following choices: i. Competition in its core market is beginning to intensify. It needs to protect its market leadership position and its margins which are under pressure. ii. They say offence is the best defence. The company has employed this approach to develop a new product which is adjacent to its current offering. The product is not market leader but has been doing well and is growing faster than the core business at present. It needs further funding in terms of marketing and promotion iii. There is significant opportunity in growing other African markets. A major partner has already done most of the groundwork for introducing the core product to new markets that could vastly increase the revenues and profitability of the business. Of course, there is some risk to consider. iv. The company was part of a government initiative that has recently ended. The government allowed it to keep the associated intellectual property as it has no relevance in the South African market. This technology can however be exploited to create new products in a neighbouring market and some reputable partners have expressed interest. The Questions: a. How should the business think about taking advantage of the above opportunities? b. What deliberate and emergent features could be deployed by the organisation to manage their strategy process going forward?

Answer 1

a.

In the given write-up the point numbers ii, iii, and iv states possible opportunities. The company could likely take the following steps in handling these opportunities to their benefit.

ii. The new product provides a low market share – high growth situation that is suitable to be identified as a question mark in BCG matrix. In such situation, the approach is to handle the product with care. It requires funding but running to the bank to secure funding may be too risky. Thus it is necessary to be prudent, experiment in the market and establish the brand as a stronger player. This may help it in becoming a cash cow or shooting star in the future.

iii. Their core product/service has opportunities in other markets. These are comparatively adjacent markets in the neighboring countries and since a partner has already done some groundwork, it is now necessary to consider international expansion. It comes with various risk but a thorough analysis and investigation (likes of PESTEL) will help in reducing that risk. They should consider building strong partners in the neighboring countries and then expand their operation.

iv. The company has a technology that is no use in the host country but can be used in neighboring markets. This will likely depend on the success of point iii. If the above point becomes a success and the company is able to launched in the international market efficiently then this technology can be used to strengthen their position in the regional international market.

b.

There are several deliberate and emergent features that could be deployed by the organization.

Firstly, they need to find a way to stave off the competition in the domestic market. The way to do is to build strong core competency and unique selling points. The association with the new product could help them become a complete package and offer more value to the customers. So a thorough market analysis and product management could be deployed.

Secondly, hiring consultants for international market, engaging the partners and considering cross-cultural nuances/risks can be a point to start. They will likely need to enter the international market slowly and need to choose the appropriate way of expanding (franchisee, direct, exporting, etc.). Nonetheless, if their domestic position cannot be defended then the international market still provides ample opportunity for growth.

Finally the technology needs studying. While their work with government has made them understand it considerably, we need to keep in mind that every country has different needs. They need to identify how the technology will help the needs of the other countries in the region. Identification of needs and requirements can be a great help.