Discussion
A. Uses the product/market growth matrix to describe the different ways a company can expand its market globally.
Product/market growth matrix, also known as the Ansoff Matrix(Weiwei, 2021). Based onCorporate Finance Institute (2021)strategic tools that businesses can use to expand their operations and enter new markets. This matrix offers four different strategies companies can use to grow their business, and each strategy presents unique opportunities and challenges for companies seeking to expand globally.(Loredana, 2021).In this article, we will explore each strategy in more detail and provide recent examples of companies that have successfully used them to expand globally.
1. Market Penetration
Market penetration involves increasing the sale of more products in the market in the current market. This strategy focuses on attracting new customers or retaining existing ones through tactics such as promotions, improved customer service or targeted advertising campaigns(Azzahra et al., 2021).Companies can use advertising and other marketing tactics to increase sales to their existing customers or attract new customers(Rachmawati et alna., 2021).For example, a company can increase its market share in its domestic market by running targeted advertising campaigns, offering promotions, or improving customer service(Fakhriyyah et al., 2021).
2. Market Development
Market development involves introducing existing products into new markets(Kinanthi Haksari, 2022). This strategy can help companies expand their customer base and increase revenue(Azzahra et al., 2021b).Companies can use market research to identify new markets and develop strategies for entering them and companies can enter new countries or regions by setting up distribution channels or partnering with local businesses.(Iqbal et al., 2022)
3. Product Development
Product development involves creating new products for existing markets(Septiani et al., 2022). This strategy can help companies attract new customers or increase revenue from existing ones. This can be done by developing new versions of existing products or launching new product lines in response to customer requests(Kahfi et al., 2022).
4. Diversification
Diversification involves creating new products for new markets(Indrawan et al., 2022).This strategy can help companies reduce their dependence on one product or market and spread the risk(Cao et al., 2021). In a journal written byAgustin & Setiawan, (2021) thata company can achieve this by diversifying into new industries or entirely new product lines to broaden its offerings and enter new markets or by product development.
By analyzing their current market and product offerings and identifying growth opportunities, companies can choose one or more of the four strategies outlined in this matrix to expand their business. Recent examples from companies such as Coca-Cola, Amazon, Apple, and Tesla demonstrate the effectiveness of this strategy and its potential to help companies succeed in global markets. Which can be accessed on the official website(Amazon India, 2022; Apple, 2022; Coca-Cola, 2022; Tesla, 2022).
The latest example of a company successfully using this strategy to expand globally is Coca Cola, quoted from the official website(Coca - Cola Company, 2023).Coca-Cola is one of the global companies that has successfully used the product/market growth matrix in its worldwide expansion(Hess, 2021)Here's how Coca-Cola uses this matrix:
•Market Penetration: Coca-Cola uses this strategy by expanding its product reach in existing markets(Xiang, 2022). Companies invest in marketing campaigns to increase brand awareness and expand distribution channels to reach more customers(Bradley Pallister, 2022). For example, in developing countries, Coca-Cola is expanding its product access by selling drinks in smaller and more affordable packages(LR Said, 2022)
•Market Development: Coca-Cola has introduced its products to new markets around the world(Jenni Tarigan, 2021)Companies use this strategy by bringing their products to countries where they were not previously available(Cinthya, 2021). To reach this new market, Coca-Cola adapted its products to local tastes and culture. In Japan, for example, Coca-Cola launched a green tea drink because it is more popular in that country than fizzy drinks(Irra Christiyanti Dewi et al., 2022).
•Product Development: Coca-Cola uses this strategy by introducing new products in existing markets(SM Riad Shams et al., 2021)The company continues to develop and introduce new variants of their soft drinks to attract new customers and expand their market share. For example, Coca-Cola launched fruit-flavored soft drinks and diet drinks to meet increasingly diverse customer demands.
•Diversification: Coca-Cola has diversified their business to reduce their dependence on soft drinks(Dr. Dian Sudiantini S.Pd.M.Pd, 2022). The company has expanded its product portfolio by introducing non-soda drinks such as mineral water and energy drinks(dr, 2023)By diversifying, Coca-Cola was able to reach new markets and expand its business beyond soft drinks(Zenal Aripin, 2021).
B. Describe how companies in a global industry pursue competitive advantage.
Companies achieve competitive advantage through innovative actions(Ernawati Ernawati et al., 2022). They approach innovation in a broad sense, including new technologies and new ways of doing things. They perceive a new basis for competing or find a better way to compete with the old way(Maya, 2022)Innovation can be manifested in new product designs, new production processes, new marketing approaches, or new ways of conducting training(Gunawan et al., 2021)Some innovations create competitive advantage by understanding entirely new market opportunities or by serving market segments that others have neglected(Muhammad Ridlo Zarkasyi, 2021). When competitors are slow to respond, such innovation generates a competitive advantage.(Michael E Porter, 1990)
In today's highly competitive business environment, companies in global industries must pursue various strategies to gain competitive advantage(Dr. Miguna Astuti et al., 2021)Competitive advantage allows a company to outperform its competitors, gain market share and increase profits(Mashur Fadli et al., 2022)There are several ways a company can pursue competitive advantage, including cost leadership, differentiation, and innovation:
•Cost Leadership Strategy
