PIONEERING STRATEGY

Pioneering means being ahead of the competitors by introducing a new product or innovation into the market first.

It is the most risky (costly) strategy but one with the potential for the largest gains. A pioneering company requires a strong research and development (R&D) capability, which is expensive. A pioneering company needs to be financially secure and requires product champions to push new ideas. Consider the Sony or Apple companies and their various pioneering developments. Good market research can offset some risk, but is problematic for novel products. Although pioneering is risky and costly, the profits that can be earned from this strategy balances with the risks.

Apple: In an interview, the CEO was asked if he was concerned that so many companies produced very similar products after Apple's releases. His reply was, no, as it shows that we are pioneering and ahead of the rest.

IMITATIVE STRATEGY

The imitative strategy aims to develop a product similar to the pioneered product (an existing new product) as quickly as possible. It takes advantage of R&D invested by others, and is less risky, but is based on a strong development capability.

When the apple iPhone came out within months many of the other smartphone leaders adopted similar touch screen technology and aesthetic principles.

THE ANSOFF'S MATRIX

The Ansoff Matrix was developed by H. Igor Ansoff and first published in the Harvard Business Review in 1957, in an article titled "Strategies for Diversification." It has given generations of marketers and business leaders a quick and simple way to think about the risks of growth.

Sometimes called the Product/Market Expansion Grid, the Matrix shows four strategies you can use to grow. It also helps you analyze the risks associated with each one. The idea is that, each time you move into a new quadrant (horizontally or vertically), risk increases.

1. Product Development
2. Market Penetration
3. Diversification
4. Market Development