Question

Jessica's manager believes that Tres Tortillas can gain an advantage over competing Mexican restaurants in the area by capitalizing on the higher demand for salsa. He believes the firm's top-secret salsa recipe could be the key to expanding into another market niche. The manager has proposed developing a line of its salsas in 16-ounce jars to sell at its restaurant. This way its loyal customers could buy its salsa outright and serve it at home. Jessica has been tasked with the determining the feasibility of this strategy. Refer to Scenario 2.2. What type of competitive growth strategy is Jessica's manager discussing?
a. market development
b. diversification
c. product development
d. product penetration
e. market penetration

Answer 1

Answer:

What type of competitive growth strategy is Jessica's manager discussing?

c. product development

Explanation:

Most companies in business usually compete over the number of customers that they can gain over time, at times called the market share. The amount of market share a business has directly affects the sales and profit margins. The market share is a limited resource, therefor companies in business have to use various strategies to ensure that they have a proportional share of the market. A business that is just starting or that is relatively young, needs a growth strategy especially if there is an existing competition with a huge market share. Growth strategies are methods that small businesses can use to expand and develop thus increasing there market share. There are different strategies that could be used. Some examples are; market penetration, market expansion, product development and acquisition of other companies.

Let as consider product development as a competitive growth strategy. Product development involves all the steps towards developing a new product or re-branding the product to attract customers. The decision by Jessica's manager to utilize the firm's top-secret salsa recipe and packaging them into 16-ounce jars to sell at the restaurant to expand their market share is a form of product development strategy.