(P3.1)
STRATEGIES FOR MARKET ENTRY
Merger, Acquisitions and Joint Venture:
A merger, acquisition or joint venture occurs when Nordstrom requires a solution effects for a special market. Companies merge equally if they have equal sizes, or if they are in same business and make same product. Merger is the composition of two separate firms, as more or less equal partners. Company merges unequally as well, where a large company merges with a small company. The reasons why Nordstrom can merge are because if they are working at a loss and that merger is the only way for the company to stay alive and also to uphold its leadership in the corporate world.
The phrase acquisition is used for the pleasant buying of one company by another, it is known
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as takeovers, when one company takes ownership of another. This can be done by making an offer to the possessor of the submissive firm or by purchasing shares into the firm and trying to take it over that way. The key reasons that Nordstrom can consider in market entry for acquisitions are to increase the market share in a business so as to be the worth leader hence, entering into new markets can make Nordstrom’s portfolio wider and at the same time increase risks. Joint venture is a venture by a partnership or a corporation to share risks or knowledge.
It is joint owned independent companies set by other organization and strategic alliances are especially useful where there are powerful reasons against a full merger or acquisition.
Organic growth is another strategy where Nordstrom can achieve by increasing output and sales. This limits any profits or growth acquired from takeovers, acquisitions or mergers. Organic growth indicative the real growth for the core of the company and see whether managers have used their skills to improve the business and how well organization has used its inside resources to increase profits.
Another strategy for market entry is franchising, which is a business plan for getting and keeping customers. It is a marketing procedure for making an image in the minds of customers about how Nordstrom’s products and services can help them. It is a way for repartition products and services that fulfill customer
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needs. Diversification is yet another strategy when entering a market which occurs when Nordstrom decides to make new products or services for new markets. There are two types of diversification. Related diversification means that a company stays in a market or industry with which they are familiar. For example, Nordstrom diversifies into clothing industry. Unrelated diversification, on the other hand, is where they have no former industry or market experience. For example, if Nordstrom invests in the food industry. STRRATEGIES FOR LIMITED GROWTH First is Market Penetration, where Nordstrom markets their existing products to their existing customers.
This means increasing revenue by, promoting the product, repositioning or changing the brand. However, the product does not change and they do not look for any new customers or market.
Another strategy is Market Development, which is where Nordstrom can market their existing product in a new market, which means that the product stays the same, but it is targeted to a new customer. For example, Nordstrom is marketing a product in a new area or sending out the product to different countries. However, the key constraints are the new uses for a product or service, alteration to boost attractiveness to new section and suitable for different countries with specific manner or requirements.
Product Development is another strategy in limited growth where Nordstrom plans to expand and develop new products to replace the existing ones, and those products are then targeted to their existing customers.
Innovation is connected to the three strategies described above but it often involves more important changes to the product or service. As a strategy, it can imply the replacement of existing products with ones which are actually new, as opposite to correction and which imply a new product
lifecycle. STRATEGIES FOR DISINVESTMENT Retrenchment is to reduce or cut down something. Usually all companies have aim to grow their businesses but not all of them succeed and many are forced to decrease the scale and area of their business activities as an intentional act of strategy. This is known as retrenchment. The things that force retrenchment are market reduction, economic recession, unsuccessful takeovers, and change of ownership, uncompetitive cost arrangement and poor competitive position. Divestment is the selling off part of a firm's operations or pulling out of certain product market areas. It is part of business often follow an acquisition. Divestment often occurs, when a company needs to increase money swiftly or when business is seen as having a poor strategic fit with the rest of the portfolio. There are problem with this strategy such as cost, unemployment payments, morale and politics - government.
Nordstrom’s retail positioning strategy provides it with the competitive edge it needs to differentiate it from competitors who also serve similar markets.
Nordstrom can continue providing their exceptional online experience and client focused approach using their online system by offering an unmatched online experience that copies their in-store customer service. This would allow Nordstrom to raise its revenue considerably as well as further improving their brand image. I will also discuss specific ways of successful execution, and the steps required to provide Nordstrom a stunning picture of how to execute strategy.
They are able to set up a product development center in a Nordstrom store for one week, which results in an app available to help shoppers buy sunglasses. In the innovation lab, Nordstrom is able to do customer centered design, concept testing, rapid prototyping, field testing, time boxing innovation, etc.
Macy 's strategy is to provide a "localized merchandise offering and shopping experience to targeted consumers" (Macy 's Inc., n.d.). Macy 's generates primary revenue through the sale
A firm 's competitive advantage is achieved through offering customers a greater value, either by way of lower prices or by providing greater benefits and service that justifies a higher price. Nordstrom strengthens its competitive advantage and generic strategy through cost leadership and differentiation in order to differentiate themselves from other high end retailers. Nordstrom has consistently maintained a unique reputation from their establishment in 1901 to the today. Since developing a strong competitive advantage from inception, Nordstrom has been able to adapt to changing environments and market conditions to maintain their success. Nordstrom has set the bench mark in the retail sector through customer service and product quality.
Joint venture and M&A are an integral part of business. Love them or hate them, you cannot just ignore them. Be it, oil, telecom, education or the food sector, or be it Reliance (RIL and RPL), Tata’s (Tata and CMC), Pfizer (Pfizer and Pharmacia), AOL Warner (AOL and Time Warner), Joint ventures and M&A’s have brought new life to the style of doing business in today’s world.
What are the differences between mergers and acquisition? M&A is a basic idea that is generally examined in literature. However, the contrasts between mergers and acquisitions are once in a while pondered. According to Dyer, Kale, Singh (2004), both of the strategies have a tendency to impart a shared opinion. The point when one organization assumes control an alternate and plainly creates itself as the new holder, the buy is called acquisition. From a lawful perspective, the target organization stops to exist, the purchaser "swallows" the business and the purchaser's stock keeps on being exchanged. In the immaculate feeling of the term, a merger happens when two organizations consent to go ahead as a solitary new organization as opposed to remain indepen...
Throughout the years, new products are invented and old ones are improved. Although many ideas are discussed and even considered for production, few make it through all the steps. Therefore, struggling through the product life cycle allows for the market to accept or decline products (Salomon, Marshall, & Stuart, 2012). In addition, changes to marketing strategies are continuous, and companies strive to satisfy wants and desires from customers.
...nal supermarket retailers will reinvent themselves over a period of time, in order to attract and maintain a loyal customer base. New concepts, neighborhood marketing, and innovation will be the key to success over the next decade.” (Imlay, 2006) What is propose is that a smart mix of products, perhaps catering to demographic tastes and needs, may tempt the shopper not drive out to the big box store, but instead loyal to their local market.
Mergers and acquisitions immediately impact organizations with changes of rights, and ideas and eventually, in practice. There are multiple reasons some are motives and financial forces just to name a few. There are financial risks of merging with or acquiring an organization this is why you must have a strategic plan in place in order to benefit.
According to Thompson (2001) Synergy refers to extra value or extra benefits which appealingly is accumulated from the connection or a mixture of the two businesses, or from addition co-operation either between separate portions of the same company or between a company with its suppliers, distributors and customers. In-house co-operation may be helpful as a connection between both different work and performances, or it can be plainly be used to calculate beneficial synergy which would create the “2+2 = 5” aftermath which means that the companies are capable to increase value while joining its product-market posture. Or, two firms may be joined and a benefit may end up from synergistic to supply a cost above that of the current cost of the two
When analyzing an organization’s target market, the first step is to understand the business and what they hope to achieve through their marketing strategies. Targeting and positioning strategies consist of analyzing and identifying segments within a given product-market, choosing which segment or segments to target, and developing and implementing a positioning strategy for each targeted segment (Cravens & Piercy, 2009). The company’s target market determines what customer group or groups the company wants to serve (Cravens & Piercy, 2009). Analyzing IKEA’s target market allows the company to determine if their marketing strategies have successfully targeted their intended customer group or groups. Discussing the company’s positioning strategy helps determine if the strategy is effective or if the company must make improvements strengthen their positioning strategy. The company must determine if their targeting and positioning strategies may be lacking. If the company’s targeting and positioning strategies are lacking, the company must determine what they must do to strengthen their targeting and positioning strategies.
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
This strategy is very much about the business which is carried out as usual. In this strategy the marketer is focusing on both the product and the market opportunity.
In product development strategy, a company tries to create new products and services targeted at its existing markets to achieve growth