One of the biggest development issues any company ahs is if they are at a stage where growth into new markets is possible. At some point the market place is going to get so crowded that a company has to decide whether it is going to try and survive in the present market or forge into new ones. Or, the company can simply create a new market through a niche product. Whatever the solution, the company first has to tak a close look at itself to determine if it is a good idea for them or not. The process by which companies do this is by determining a strategic plan whereby it is possible. To implement this strategic plan a company will have use different approaches that take into account how the company is doing at all levels of the process. Considering that a certain company is looking to move into a new market that utilize certain of their products in different ways and with a different clientele. The strategic development plan is to help bring this into action.
For any type of strategic plan, there are a large number of different approaches that can be used. The planning team has to use approaches that will lead them to a conclusion regarding the particular problem they are having. These steps are direction, creation, rehearsal, evaluation, and choice. The team has to be sure of the direction in which they want to move, and they have to base this on the information that they have about the firm and the market they wish to explore. Creation requires and in depth look at the company and how it will handle the proposed change. One example of analysis for this stage is using a strength, weakness, opportunity, threats (SWOT) model to determine how the company will deal with the upcoming strategic plan for growth. Rehearsal involves a simulated run to see what may need to be added or subtracted from the proposed plan, and then the effort is evaluated. Finally a choice is made as to whether the company should move forward or not. This paper looks at how different strategies will work when a company is planning a move into new markets, and if the approaches used are effective or not for this type of strategic development. The company used in this case study is Apple, Inc. And its attempt to create new markets that could induce new growth.
Pride and Ferrell (2006: 315) say that "Brainstorming and incentives or rewards for good ideas are typical intrafirm devices for stimulating development of ideas." Brainstorming is about finding the direction that the company wants to take. It is a good technique to use when a company knows that it needs to move in a certain direction, but needs a list of options to consider prior to testing any for validity.
The idea was originally tom involve a group of people (or it could be an individual) in being creative and throwing out as many ideas as they could think of. The session usually lasts just a short period of time because it is a stream of conscious-type of idea. The creator of the concept, A.F. Osborn, said that there are four principles for making sure that creativity is allowed to flow through a brainstorming meeting (Osborn, 1963). He said that the more ideas that are presented, the better. No one should ever stop the flow of creativity because there is no way of knowing which idea will be the one that creates the most opportunity. In Apple's case, there were constant brainstorming sessions when the different teams were trying to come up with ideas for new products. The iPod and the iPad both grew out of such creativity sessions.
The next two phases of the brainstorming process is that the participants need to withhold even the slightest criticism to any idea that is presented, and the team must encourage people to come up with ideas that may at first seem unusual. These two parts of the plan flow into one another because people are going to want to criticize some ideas that seem "off-the-wall," but the plan says that anything is up for consideration. Many times during the creative thinking process, Apple's former CEO would have to ask that people stifle their criticism until all of the data could be gathered (Rubenstein, 2008). It is not anyone's job to tell another what is a workable plan and what is not. Without some out-of-the-box thinking, Apple would never have created products that some believed were impossible, and others believed were not doable with the knowledge to be obtained at the time.
The final part of brainstorming is that the people involved do need to critically analyze all of the ideas that have been presented and determine whether they are possible or not. This part of the process of brainstorming cannot devolve into personal critiques of the ideas presented because even the craziest sounding ones could still be workable solutions with a little bit of modification. This is a time when ideas need to be molded into something that can be used going forward.
The most positive aspect of this process is that it allows people with diverse ideas to express them. Sometimes this can work when all four steps are followed and the goal is to find many possible solutions to a strategic growth problem. However, this could be a waste of time and actually cause enmity between team members if there are strong disagreements about the viability of some of the ideas. The group needs to have a strong moderator who is willing to enforce the rules of the process from the very beginning of the exercise.
The acronym PIMS stands for profit impact of market strategy. It was developed as a process that could help a team move from finding a direction to creation, rehearsal and evaluation. The reason that such a process will work well in consort with the wide range of possible ideas found in the first (brainstorming ) stage is that it takes into account the marketing framework within which the ideas are going to be presented and analyzes which will work best. Apple now had a great deal of ideas, and they were trying to create a new market because they realized that the one that they were in was overcrowded and very competitive. This meant that Apple either had to grow market share within the confines of what the industry already offered, or they had to grow their own markets. The company executives also realized that this was a strategy that could have no end because as soon as they developed a new product, there would be a flood of similar products hit the market. Everyone in the industry was capable of reverse engineering a product very quickly.
The PIMS approach works by analyzing three different aspects of a company (Buzzell & Gale, 1987).
"A description of the market conditions in which the business operates; the business unit's competitive position in its marketplace; and, measures of the SBU financial and operating performance, on an annual basis, over periods ranging from two to 12 years."
This the process by which former Apple CEO Steve Jobs decided that the management team needed to determine new markets that the company could enter. They looked at what Apple's business standing was at the time before they offered their new products, and the company was quickly failing. The reason that they brought Steve Jobs back on board after a long hiatus was because he was the marketing guy and creative voice that had given the company such success in the first place. Apple was trailing far behind other manufacturers, and they really only had one business that they were running. They were the alternative computer manufacturer (both personal computers and laptops) for the customers who did not like the IBM clone products which ran on Microsoft software. It was a niche market, but they were losing more customers because their products were more expensive and they would not run nearly as many software applications as the clones did. Steve Jobs decided, after looking at the analysis, to go another way (Rubenstein, 2008). He decided that the market that they were in would never respect the Apple name, and that they would slowly die because more and more people would have to move to the clone personal computers.
This analysis does not seem to have any weaknesses because it takes data from the market so that a company can see if its strategy will work or not. Apple decided to move into new markets and they did an analysis of the current market to determine what the possibility of success would be. Because they realized that they would not be able to move forward as they wanted to if they remained positioned as they were, they decided to take the plunge and move forward with the…