To improve its marketing performance and competitive position, Bob and Lou’s Café has to enhance its position in existing markets. In this regard, the company has to increase its market penetration and focus on new product development. The market penetration means the provision of new services and products or existing services and products of the higher quality. In such a way, the company will increase the market penetration because the company will enhance its position, increase its sale rates and attract more customers. The introduction of new products can offer the company an opportunity to enhance its marketing position because new products will distinguish the company from its rivals and increase the competitiveness of Bob and Lou’s Café. For instance, the introduction of fast food products will attract more customers from fast food restaurants to Bob and Lou’s Café, where customer will enjoy not only fast food products but also traditional products of the company and its authentic atmosphere.
b New markets
At the same time, the company should focus on entering new markets. This means that Bob and Lou’s Café should focus on the market development and diversification of products. The market development means the penetration of new markets and expansion of the market share of the company. In this regard, the diversification of products can be very helpful because the wide choice customers may have in Bob and Lou’s Café will attract more customers to the café and they will enjoy the high quality of services and diverse products offered by the company. The diversification of products is the key to the marketing success of Bob and Lou’s Café because, today, consumers are very concerned with the broad choice of products and services available at a café.
D Approaches to strategy evaluation and selection
1 Alternative strategies for Bob and Lou’s Café
In actuality, Bob and Lou’s Café faces a number of alternative strategies for the further business development and market expansion. First, the merger strategy implies that the company will merge with other companies operating in the same segment of the market. In such a way, the company will expand its market share fast but will need to conduct restructuring and re-organization to complete mergers successfully.
Alternatively, the company should focus on the growth that means considerable investments into the development of the chain of the company. In case of choosing the growth strategy, Bob and Lou’s Café will need substantial financial, human and material resources to conduct the market expansion and growth fast and effectively.
The company may also consider the strategy of retrenchment. Today, this strategy may be effective in a short-run perspective because the company will cut spending and save costs. However, the problem is that Bob and Lou’s Café will cut spending and save costs at cost of customers. This strategy is likely to lead to the deterioration of the quality of products and services offered by the company to its customers.
2 Merger and acquisitions as the future strategy for Bob and Lou’s Café
In actuality, the strategy of merger and acquisitions is the most effective for Bob and Lou’s Café. Mergers and acquisitions allow the company to save costs on the market expansion and to keep growing fast. The company can expand its chain fast through mergers and acquisitions and increase its market share fast. Thus, the company will improve its marketing position consistently, while, in case of mergers, the company will not need to raise substantial funds to complete mergers. Therefore, mergers and acquisitions may be cheap, easy, and fast way to the market expansion.