VU VICKY Virtual University Assignment Solution, Past Papers, Handouts and other material

GDB SOL MGT520

Ø  Challenges could be faced by Sasa in the introduction or growth stage in Mainland, China.

The introduction stage of a PLC is when a company starts building awareness of its product in different markets. During this stage, a company focuses on pricing, advertising and distribution of the product. Growth stage is when sales begin to increase and there is a high demand for the product.

Following challenges could be faced by Sasa in introduction stage in Mainland china.

1.      High Cost: After creation of the product, Sasa needs to market its product in order to achieve high demand which could cost a lot of money.

For this purpose, Sasa may use print, electronic and social media as well which will require heavy investment. If Sasa remains unsuccessful in the development stage of its product during the launch, it may cause product failure.

2.      No profits: After taking the first (marketing) step which may take huge investment, Sasa may see negative profit in the initial stage of the product.

3.      Competition: When the product start receiving demand in the first stage, sales curve may gradually rise. Competitors now will start entering to the market. At this stage, Sasa will face a set of challenges as it now has to compel consumers to prefer its product. This will require a new set of strategies to compete.

4.      Falling prices: Firms are able to charge higher prices of their products in the introductory stage, but as the competitors will start entering to the market with less expensive products, this may cause Sasa to reduce its prices in order to defeat competitors and increase sales.

Ø  Challenges could be faced in its maturity stage in Hong Kong.

At this stage, price competition becomes extreme. Sales are on peak and companies try to hold their brand preferences making more differentiation in their product.

Sasa could face the following challenges during this stage:

1.      Decreasing market share: As there will be a large number of producers in the market, it will become difficult for Sasa to maintain its market share because all other competitors are trying to increase their share.

2.      Decreasing profits: Sasa may see declining of the profit as it has to be shared amongst all the competitors in the market. There will be a fall in sales and thus in profits.

3.      New technologies & changing consumer taste: Sasa’s main objective is to increase its market share. Technological advancements shift in consumer taste and increases competition. Sasa will have to modify its product with quality, features or style in order to increase or maintain the usage of the product.