In the previous post, we explored the BCG Approach to analyze current business portfolio.
Beyond evaluating current businesses, designing the business portfolio involves finding businesses and products the company should consider in the future. Companies need growth if they are to compete more effectively, satisfy their stakeholders, and attract top talent. At the same time, a firm must be careful not to make growth itself an objective. The company’s objective must be to manage “profitable growth.”
Source: Invisia
Marketing has the main responsibility for achieving profitable growth for the company. Marketing needs to identify, evaluate, and select market opportunities and lay down strategies for capturing them. One useful device for identifying growth opportunities is the product/market expansion grid
1. Market Penetration
Company growth by*** increasing sales of current products*** to current market segments without changing the product.
2. Market development
Company growth by identifying and developing new market segments for current company products.
3. Product Development
Company growth by offering modified or new products to current market segments.
4. Diversification
Company growth through starting up or acquiring businesses outside the company’s current products and markets
Companies must develop not only strategies for growing their business portfolios but also strategies for downsizing them. When a firm finds brands or businesses that are unprofitable or that no longer fit its overall strategy, it must carefully prune, harvest, or divest them.
Next post, we will talk about the importance of partnering in order to build customer relationship.
The article above contains my personal views/reflections on the subject matter; As well as some excerpts from the book "Principles of Marketing" written by Kotler and Armstrong.
