Question
Forming partnerships and engaging in strategic co-opetition are crucial when diversifying into a new product and a new market because they can help mitigate the risks associated with this growth path. Partnerships can provide access to new distribution channels, retailers, and servicing for new products, which are all new organizational capabilities required in this path. Strategic co-opetition, on the other hand, can help a company leverage the strengths of competitors to gain a foothold in the new market. Both strategies can help a company navigate the challenges of launching a new product and penetrating a new market without damaging existing operations.
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This path creates top line growth by selling new products to new customers. It is one of the riskiest growth paths requiring entirely new organizational capabilities like fresh distribution channels, new retailers and servicing for new products. The reward is reduced long term risk as a diversified portfolio is better equipped to withstand market shifts. Before embarking upon this path, it's imperative to be confident about the company's ability to launch a new product and penetrate a new market without damaging existing operations. This is to be chosen only after exhausting all other growth paths. Its best pursued during periods of prosperity with surplus revenue and high shareholder confidence. Attempting this path during times of crisis could be fatal. Even a big multinational diversifying into a new product and a new market is an unproven underdog in the new market. Therefore Partnerships (Path 8) across Product Design to Sales and even strategic Co-opetition (Path 9) are crucial...
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