Market attractiveness
Market attractiveness (MA) can be viewed from the perspective of the market potential and the competitive intensity, the two being its key dimensions. Market potential allows defining whether the environment of the market in question is favorable for a company to evolve in (e.g., the need for products in question, low competition rates, etc.). The competitive intensity, in its turn, defines the chances for the company to succeed; the higher the competitive intensity is, the fewer are the opportunities for growth.
Seeing that the return expected by the investors is considerably higher than the current capital, the adoption of the exit strategy will not bring the desired outcomes. Seeing that the organization in question is relatively new and needs to get accustomed to the target market, as well as to explore the demands of the target customers, the niche strategy seems to be the most reasonable route for the company to take.
As far as long-term objectives are concerned, the further expansion into the larger market and the possible attempts to integrate into the global market will require that the growth approach should be adopted.
How will you actually make money?
Since the organization is relatively new to the market, the long-term partnership with another company, which has already been established in the target market, is a reasonable choice to make. It is expected that the company will produce a variety of products; therefore, the razor–razorblade model will be accepted as the basis for defining the organization’s strategy in the target market.
Seeing that the company is only starting to explore the market in question, it will be reasonable to follow the long-tail principle when defining the size of orders. The organization will cooperate with the local suppliers and retailers; as far as the distributing functions are concerned, the organization is going to perform them on its own, as the costs for hiring distributors may disrupt its success in the target market. While the drop in liabilities, which a partnership with the distribution company may ensue, is quite alluring and the support of a strong partner is essential in the present-day food and beverage industry, the company will have to adjust to the new environment first.
What are the elements of your positioning?
Home-cooked pastries and other types of a bakery can be viewed as the key differentiating ingredient, which the company is going to promote to the target customer. While the concept of home-cooked food is admittedly far from being new, there are very few companies that manage to do their job properly. Therefore, the home-cooked bakery can be viewed as the differentiating element. Herein the value proposition for the target customers lies; instead of selling its clients the food that was produced on a conveyor belt, the company will offer home-cooked food to its clients. The benefits of the product in question are quite obvious – the food will incorporate only the ingredients that are defined as natural.
With the help of the brand in question, the company will be able to “own” the local home-cooked food market and even evolve to become a worldwide leader in the specified niche. The brand products will be released under the slogan of “No place like home.” Once tasting the food cooked by our company, the customers will realize that home-cooked food helps create an environment that makes them feel at home no matter where they are.