Why make market development plan
1) To achieve economies of scale
2) Key competency is your product service
3) Your product is nearing the end of its life
Product Development
1) Product modification
2) Product expansion
3) Product extensional
4) Completely new product
Reasons for diversification
1) To gain rapid market dominance
2) Economies of scale and synergy
3) To reduce risk and privately own business
Advantages and disadvantages of the franchisor
Advantages -Way of expanding business quickly -Financing cost shared with franchisees -Franchises usually are highly motivated since their livelihood depends on success
Disadvantages
- British franchise Association rule take time and money to comply with
- Loss of some control to franchisees
- Franchisees can influence the business
- May be obligated to franchise the legal agreement
Advantages and disadvantages of franchisees
Advantages
- less risk of failure
- Easier to finance their own start-up
- Quicker to start up
- Training and support from franchisor
- National branding should help sales
Disadvantages
- Not really your own idea
- Lack of real independence
- Franchisor makes the rules
- Can be expensive to buy into
- Royalties can be high
- Goodwill will build up dependent upon continuing franchising agreement maybe problems if you wish to sell
- Franchisor can damage brand
Growth options
1)Product service development
2)Diversification
3Market penetration
4 Market development
Strategy implications
1) problem child
- Develop opportunities
2) star
- Invest for growth
3) Cash cow
- Manage for earnings
4) dog
- Generate cash
