Concentration or diversification ?

Many time without writing in my blog ……

I come back to this world with something really useful for the companies ” CONCENTRATION / DIVERSIFICATION when we decide go out to the foreign markets . It is not an easy task ¡¡¡

jumping to the foreign market
jumping to the foreign market

When we choose to do a market expansion , it involves an allocation of much effort among several markets . The major alternatives will be concentration or diversification ; A concentration strategy on a small number of markets or even a diversification strategy , a growth in a large number of markets with the stages of international market expansion.

They re applicable to market segments or even to total markets ; it will depend on the resource commitment the international marketer of the firm is able to make . We ve 2 options : a dual-concentration strategy and dual-diversification strategy ; a dual-concentration strategy , the efforts are focused on a few segments in a limited number of countries . A dual-diversification strategy , the entry is to most segments in most available markets . The first strategy is a strategy for the small firms or even firms that sell specialized products to clearly definable markets . The second strategy is a strategy for the large companies which are oriented to consumer companies that have sufficient resources for broad coverage.

Market concentration/ segment diversification opts for a limited number of markets but for wide coverage within them putting emphasis on company acceptance.

Market diversification/ segment concentration involves the identification of a segment  in the world to which the company can sell without major changes in its marketing mix .

Factors that affect to the expansion strategy can be related to markets , mix and company .

For example market growth rate, sales stability, economies of scale in distribution, need for adaptation of the product and so on .

Beatriz M.

 

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