Strategic Case Analysis
A company has taken on substantial debt in order to expand to new markets, but several of the new markets have been very slow. It now seems questionable whether some of these new markets will ever be successful enough to justify the amount of debt. I have suggested three strategies they could use to help them with their debt and new markets.
1) One strategy they could use for marketing is the product marketing strategy. They can use this strategy to develop new products for their new markets. The new markets just might need new products to increase growth and with that they could pay off the debt that they owe.
2) Another strategy they could use is the strategic alliance strategy. They could use a short term alliance to establish themselves in the new markets. The concept behind strategic alliances is to minimize risk while maximizing the company's leverage in the marketplace. With strategic alliances they will be able to expand the company without committing themselves to expensive internal expansions beyond their core business and get the money for their debt.
3) To help them get through their difficult time right now they could also use the profit strategy. The concept is to artificially support profits by either reducing investment or discretionary expenditures that are short-term. It is like a deferment to where they can cut certain expenses to stabilize profits during the timeframe allotted. Uncertainty seems to be there with the new markets and stabilizing profits could help with the debt.
Reference:
Hunger, J.D., & Wheelen, T. L. (2007). Essentials of Strategic Management (4th Ed.). Upper Saddle River, NJ: Pearson Education, Inc.
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