Existing Market Segments With Existing Products example essay topic

Strategic pathway: Establishing the right sequence of strategic priorities. Four stages are sited. First protect your existing business. Then, penetrate further into existing market segments with existing products or upgrades. Next, extend the business by creating new products for existing segments or by entering new segments with existing products. Finally, diversify into new markets with new products.

This article was primarily written for midsize company management -specifically the manufacturing sector, but the authors see usefulness for other businesses including service industries. James E. Ashton served as the chairman or CEO of a number of midsize manufacturing companies. Frank X. Cook, Jr., is a consultant to such companies. Paul Schmitz is the CEO of Thema Sys, a maker of heat-transfer products. Ashton and Cook authored "Time to Reform Job Shop Manufacturing". Their theory is that midsize companies can produce growth rates of 15% to 20% per year, over the short term by focusing on the unexploited potential of seemingly mature businesses.

Their key to success is operational excellence. By continuing improvement in areas that contribute to customer satisfaction tremendous competitive advantage can be gained. They view the mistake of too many companies is that they don't follow the right sequence of strategic planning. Most companies jump to diversification to early and therefore their earnings don't reach true potential at the least. This article contributes to the course's strategic planning chapter.

The article sites strategic planning as a benefit for management development. The authors believe corporate strategy is overrated, and that the important strategic work to be done at most companies is at the business-unit level. Like our text, the article makes detailed mention of how companies have systematic ways of analyzing ongoing programs. Most mentioned is the value chain analysis: profit improvement opportunities through linkages with suppliers, profit improvement opportunities linkages with customers, and process linkages with the value chain of the firm. Also, I see a connection with our coverage of the Balanced Scorecard.

The strategic pathway stresses feedback around both the internal business processes and external outcomes in order to constantly progress strategic performance (operational excellence) and results. The authors' personal observation is that most of the latest management fads imply: the pursuit of the big acquisition, or the huge new market opportunity. Yet, companies with revenue of less than, $750 million don't have the financial or human resources to do everything at once. They view these approaches as doing "nothing more than distract managers from the job at hand: getting the most out of their existing business".

The authors's tress building a foundation before exploring other unknown territories, and risk. Often management gets caught up in trendy techniques and loose out on magnifying their potentials already in place (but unrealized). The article's usage of inside corporation scenarios helped me visualize the techniques and provided good examples too. I found it helpful the straight-to-the- point tone and style used by the authors, this not only helped in my understanding of the right strategic sequence, but kept my interest as well.

They back their theory with personal observations and good ole common sense- "understand what you have, why you have it, who's after it, and how to keep it". Harvard Business Review. June 2003. "Uncovering Hidden Value in a Midsize Manufacturing Company". James E. Ashton, Frank X. Cook, Jr., and Paul Schmitz.