Give three reasons why, at some point, every business needs to examine growth opportunities outside the markets it serves. Name and describe four fundamental offensive strategic market plans for entering new markets

What will be an ideal response?

The need to examine growth opportunities outside existing markets can occur for three fundamental reasons:
(1 ) The number of attractive market opportunities within existing markets may be limited;
(2 ) New-market opportunities outside existing markets are simply more attractive in terms of meeting the business's overall performance objectives; and
(3 ) A move to new markets helps diversify a business's sources of profitability and, hence, reduces variation in performance.

The four fundamental strategies for entering new markets:
(1 ) Enter Related New Markets: This strategy involves entering new product-markets that are related to current product-markets for a firm. Entry into related markets enables a firm to potentially leverage its brand name awareness, reputation for quality, manufacturing and design expertise, and/or marketing channel and sales systems.
(2 ) Enter Unrelated New Markets: One of the primary advantages of an unrelated new-market entry strategy is reduced market dependency. Most markets go through temporary periods of expansion and contraction, and investments in unrelated businesses will have a smoothing effect on revenues and profits of the combined portfolio.
(3 ) Enter New Emerging Markets: New emerging markets are those into which customers have not yet entered. Although considerably risky with respect to profit performance, this strategy can enable a business to establish an early leadership position in the market. From this position, a business can influence product positioning and market growth.
(4 ) Develop New Markets: A growth strategy to develop an untapped new market involves high risk but offers the potential for high return. The cost of developing a market can be significant even if the product is a good customer solution. On the other hand, there are few if any competitors, so a business has the opportunity to pioneer a market that has so far been largely ignored. With a "first-mover" advantage, the business has the potential to own the market until other competitors venture entry.