Strategic Planning: Market Development
You can strategically grow by leveraging your product knowledge to reach new customers. More than likely, you’ve spent time and money developing your product and service offering. Assuming you’re happy with your current offering, extending it into new markets is a logical next step. Taking that next step is aptly called a market development strategy. If you have identified potential new markets as opportunities, you can use these strategies to reach them.
Here are some considerations to make before executing a market development strategy:
Is the market attractive? (To really answer this question, some form of market research should be consulted to validate your gut feeling.)
Are you willing to commit the required time and resources to reach this new market?
Can your business adapt to the new market?
Will you maintain your current competitive advantage in this new market?
When you’re thinking about expanding, first think about where you want to cultivate new business. Your options are to expand to other regions locally, nationally, or internationally. Geographical expansion works well for a company that wants to expand its service territory because it needs a physical location to serve its customers. Clearly your ability to expand is subject to your ability to finance such an expansion.
Many of the big boys of business, including McDonald’s, Wal-Mart, and Home Depot, have exported their operations to other countries. On a smaller scale, many microbreweries have opened up new locations in various metro areas and airports in the United States as a way to expand their geographical reach.
You can also grow by reaching a completely new set of customers or market segments. This area is such a popular growth strategy because you leverage the products and services you’ve developed.
Examples of this strategy abound, such as Bayer aspirin now being sold not only for aches and pains but also for heart attack prevention if taken daily.