The document outlines two potential strategies - minimal development and high development - for a company's Delta division responsible for a new product. The minimal development strategy focuses on the current market with low risks and capital investment. It maximizes investment for another division developing new products. However, it could lose market share long-term and be less future-proof. The high development strategy aims to greatly increase market share globally through next-generation manufacturing and new market entry. It focuses investment on known products but entails higher risks, exposure to losses, and potential disruption if expansion falters. Gains could generate more capital long-term but with less initial capital for the other division.

2. Strategy
Themes
Minimal
development
strategy
Market research
study
Focus on
current
market
Study current
market +
overseas
partner’s
market
High
development
strategy
Study
global market
Don’t do study
DQ 101
Manufacturing
process
Dealing with price
volatility of input
Use
existing
manufacturing
process
Fixed-price
contracts
Improve
existing process
Design
& build next
generation mfg
process/
capability
Outsource mfg
Revise product
price
periodically
Re-engineer
and replace
volatile input
Maintain
high inventory
Capacity to be
built into
production plant
Meet
current market
share
Meet current
market share
and new
overseas
market
Meet
potential global
market share
Do nothing
© 2013 by Strategic Decisions Group. All rights reserved.
How to enter
overseas market,
if at all
Do not
enter
Pilot/test
market entry
Sell through
established
distributors
Direct
investment to
enter
Enter with local
partner
www.sdg.com

3. Strategy 1: Minimal development
Minimal risks/conservative development for the Delta division responsible for the new product
Advantages:
- Low capital risks in short term for Delta division that is responsible for the new product
- Maximizes investment capital today for Gamma division (the “new” division responsible for untapped
markets that is developing three new products)
- Greater protection for surviving a bad year
- Low investments (in R&D, tech, recruiting, etc)
- Focus on what we know/do best with Delta
- Control quality of the Delta product/services we are producing/manufacturing
Disadvantages:
- Low investment on Delta could be high-risk in the long-term, company could lose its core Delta market
share before investment in Gamma pays off
- Opens markets for Delta competitors to establish strength/ownership
- Less “future-proof” if Gamma requires greater investments
- Low Return On Investment

4. Strategy 2: High development
Ambitious and high development of the Delta division responsible for the new product
Advantages:
- Focus investment on known products (as Delta is the “traditional” division of ZyrTex) in markets to be
confirmed by research
- Potentially greatly increased market share, income and cashflow once the ROI/break even points are
reached, due to increased pool of customers and next-gen fabrication process
- Potentially generates greater future investment capital for Gamma division, if Delta pays off
- More global recognition of the brand, overall stronger value proposition, making ZyrTex a stronger
competitor
Disadvantages:
- High investment in next gen manufacturing and entry in new market implies high risks
1) Greater exposure to losses
2) Potential of borrowing from future cash flow
3) Less capital for Gamma at first and potentially in the long term if results from Delta expansion are
lackluster
- Could disrupt the core activity, if global entry falters or new fab process fails in current market