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Market Growth Strategy Essay

708 Words3 Pages

CHAPTER TWO
1. Literature review
This chapter highlights the available literature relating to entry, performance and growth strategies of Kenyan IT companies venturing into regional markets as well as the critical success factors related to each. The researcher has reviewed and discussed findings of studies that touch on entry, performance and growth strategies adopted by companies while venturing in regional markets and the most effective strategy for operations management in these markets. Growth factors affecting Kenyan IT in the regional market and strategies are most effective for growth has also been discussed.

2.1. Factors that influence expansion into the regional market
Globalization has occasioned increasing number of international strategic alliances among businesses. This is in form of exporting, foreign subsidiaries and having regional offices. Essentially, …show more content…

Hollensen (1998) stated that organizations should identify similarities among the markets they are eying to be able to take advantage of regional business. The advantages of market similarity include economies of scale, a smaller amount of working capital, lower marketing costs, cost savings in research and lower unit costs for the product or service (Frandberg and Kjellman, 2004). The market life cycle and product life cycle are similar both having a beginning all through to the decline stage. It is important that organizations identify which stage a market is in order to consider market expansion strategy (Keegan, 1995). Ruiz, and Nicolau-González et al (2007) noted that a company in a declining market would consider diversifying into other markets.

Growth rate is related to the market life cycle. Slow growth rate in the current market is slow; a firm will warrant expansion to other markets while high growth will force a firm to

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