Allen Corporation

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Market strategy to reduce risk:

It will have to be decided that which sector will have to be served and in what manner. In this they're the two strategies that can be used which are narrow and wide scope. In narrow scope the less number of customers are served and by this the risk in relation to competition will be reduced and also specialized knowledge will be built in this case. In case of wide scope the large group of consumers will be provided with the services. In this risk of uncertainty will be reduced (Chesbrough, 2010). Smart shoes will be using narrow scope as it will be a new venture so the main focus should be to deal with the competitors and that can be done with this. Also it will not be possible for it to serve large number of customers at initial stage. As per this strategy, the product range that is offered is limited to provide to particular needs of the customers. If customized products are offered, risk related to competition is low which is needed since it is a shoe and there are already great competitors in the market for the product. Since the company competes in a limited or single segment of customers, and more customized experience is the goal of the company, the risk is less. We will use Narrow scope strategy which provides differentiation and creates exclusivity by targeting the specific segment of the society. We will try to make shoe for the rich income people segment by using high quality material and niche branding because in case of narrow scope, the product visibility and profit margins will be very high.

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Imitation to reduce risk:

In the business there is risk that the product will be imitated by any other party and that will not be good for the venture so for this it will be required to use the suitable strategy by which this risk can be reduced. As the business is new so more changes shall be avoided and it shall be considered that required modifications are made in the current methods so that risk can be reduced. It shall be noted that no major research and development cost shall be incurred and it should always take decisions by considering the strategies used by competitors and determining whether they were successful or not (Osterwalder & Pigneur, 2010). In order to make the product a success it can be considered that the product shall be launched in the new market in which there are less chances of risk involved. Me-too strategy could have been more beneficial and less risky at the same time. Though the costs associated are less in me-too imitation strategy but it has greater risk of not being able to proper imitation of the product since it depends on various factors. We would like to imitate the marketing strategies adopted by various organizations in different sectors to penetrate the market. Further, we would like to imitate how the world class organizations do Quality Function Deployment to meet customer expectations through an innovative product. We will imitate it with high quality with lesser price than competitors.

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CONCLUSION

From the above mentioned report it can be concluded that in order to start a new venture there will be requirement to carry out various analysis. As by the help of the information collected decisions will be made in relation to the various aspects such as strategies that will be used and the market segment to be covered. Also there is risk involved in relation to competition which will also have to be considered in advance so that it can be dealt with in the most appropriate manner.

REFERENCE

Books and Journal

Loch, C. H., DeMeyer, A., & Pich, M. (2011). Managing the unknown: A new approach to managing high uncertainty and risk in projects. John Wiley & Sons.

Blank, S. (2012). The startup owner's manual: The step-by-step guide for building a great company. BookBaby.

Cassar, G. (2014). Industry and startup experience on entrepreneur forecast performance in new firms. Journal of Business Venturing. 29(1). 137-151.

Chesbrough, H. (2010). Open services innovation: Rethinking your business to grow and compete in a new era. John Wiley & Sons.

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons.

Matusik, S. F., & Fitza, M. A. (2012). Diversification in the venture capital industry: leveraging knowledge under uncertainty. Strategic Management Journal. 33(4). 407-426.

Wang, M. C., & Fang, S. C. (2012). The moderating effect of environmental uncertainty on the relationship between network structures and the innovative performance of a new venture. Journal of Business & Industrial Marketing. 27(4). 311-323.

Online

Why you must have Feasibility report Before Starting a business. 2017. [Online]. Available through: http://www.noomii.com/articles/5800-why-you-must-have-feasibility-report-before-starting-a-business>. [Accessed on 21st July 2017].