Question

Define the three intensive strategies (market penetration, market development, and product development). Give examples and guidelines for when each is strategically appropriate.

Answer 1

Market penetration: It is defined as the strategy where company looks to gain market share in the industry through promotion and marketing. Example Samsung gained market share in the industry as Nokia was losing the market share.

• It is effective when the competitors are losing market share in growing industry.
• There is a positive demand response from current customers and new customers.
• The industry is not saturated.

Market development: It is defined as strategy where the company looks to enter new markets. Example Harley Davidson expanding in Asian countries.

• There are potential markets available for expansion.
• There is a global demand for the company.
• The production capacity is excess as compared to demand.

Product development: It is defined as the strategy where company looks to introduce new products in the industry. Example Mobile phone companies bringing phone upgrades to ignite new demand.

• The current product is in maturity phase.
• High quality offerings from competitors.
• Company high focus on research and development.