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“Having entered the European market, growth requires that they expand their range and target new segments. Suggest (and justify) how you think Daewoo should diversify their

product portfolio. To what extend do you suggestions require modification of their positioning strategy?”

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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Introduction:

What is Diversification:

The major classes of diversification are concentric, horizontal and conglomerate.

1. Concentric diversification is a growth strategy in which a company seeks to develop by adding new, but related, products to its existing product lines to attract new customers.

2. Horizontal diversification is a growth strategy in which a company seeks to add to its existing lines new and unrelated products that will appeal to its existing customers.

3. Conglomerate diversification is a growth strategy in which a company seeks to develop by adding totally unrelated products to its existing business.

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Current (1995) Product Range

Nexia:

Espero:

“targeted at the UK mid-sized car driver segment”

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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“So…. Does Size Really Matter?”

We will be examining three possible diversification strategies in regard to size:

“Sub-Compact” Vehicles

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SUV’s

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Mini-Vans

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“So…. Does Size Really Matter?”

Daewoo Sub-Compact Cars?

Price efficient (fuel)

Practical (parking)

Cheap Maintenance

Environment friendly

Unpractical for families

Lower safety

High competition

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“So…. Does Size Really Matter?”

Daewoo Mini Van’s?

Family friendly

Practical (due to size)The trend shows people have less children-> smaller families!

Demographics

Is in the category of 52.4% of new cars bought

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“So…. Does Size Really Matter?”

Daewoo SUV’s?

Price Competitive

Comfort

Image

High Maintenance

High fuel consumption

Unpractical in cities (parking)

Is in the category of 52.4% of new cars bought

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“So…. Does Size Really Matter?”

“Sub-Compact” Vehicles

1

SUV’s

2

Mini-Vans

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• This step would distract from Daewoo’s current family image.

•Repositioning to Young/Middle-aged Urban drivers

• This step would also distract from Daewoo’s current family image.

•Repositioning to Young/Middle-aged drivers from higher socioeconomic backgrounds

• This step would go in line with current positioning strategy

•Deawoo mini-van…“growing with the needs of your families”

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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High-end Luxury Cars

We will be examining the possibility of creating a high end, luxury car in the class of:

BMW7 Audi A8 Lexus IS

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Daewoo High-end Luxury Cars?

Growing demand for luxury cars

Prestigious effect on Brand image

Expensive

High maintenance costs

Incompatible current brand image

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High-end Luxury Cars

Implications of high-end luxury car marketing:

How to do it:How not to do it:

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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Alternative Fuels Cars

As one further step to diversify their product range we would suggest to enter the alternative fuels car market and offer a highly price

competitive environmentally friendly option.

The green cars…

Options include:

Hybrid Engines Electric Cars

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Daewoo Alternative Fuel Cars?

Growing demand for such cars

Government subsidies

High Investment required

Infant technology Competitive Advantage

No economies of scaleCheap fuel!

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Alternative Fuels Cars

This option of diversification may be most risky, but can offer big long term rewards, as there will be no way around offering alternative fuel

cars within the next 50 years.

Being amongst the first players in the market is highly valuable.

Daewoo has the opportunity to enter this market with its current positioning strategy, targeting families and being price competitive.

The green cars…

Hybrid Engines

Electric Cars

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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1. Introduction

2. Suggestions

1. Size

2. Class

3. Alternative Fuels

3. Conclusion

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THANK YOU!

Alternative Fuels Cars

•Almost all options for diversification will consequently require a repositioning by Daewoo.

•This applies particularly to the options of going into luxury car market.

•Also, it needs to be mentioned that any change in positioning and targeting strategy should be pursued carefully as it requires some time for the image of a brand to change in the minds of the consumers.

•Lastly it is important to emphasise that the benefits of diversification will have to be higher than the costs of it.