Evaluation of Options

Having learnt about the possible growth strategies of Hang Ten, we now move on to evaluate and assess its attractiveness in serving the options.

According to Ansoff’s Growth Share Matrix, we see the four options that Hang Ten could consider in developing its future growth strategies. 

Rejected Options

In line with Hang Ten Holding’s current growth strategy, it is unlikely for Hang Ten to expand into other markets as there are still much potential in the current markets that is not being reaped. Also, although existing products can future penetrate existing customer markets are push into additional ones, new product introductions are often vital to the long-run success of a firm

It is unlikely for Hang Ten to delve into market development, because the parent company already has other brands under its belt that caters to them- for example, Arnold Palmer (under the same parent company) is a brand that targets older men.  We will not want to risk conflict of interests with brands under the same parent company.

Therefore, we can rule out the possibility of market penetration or market development in the next 5 years.

Possible Options

In product development, the line extension options of launching kids apparel and targeting fashionable young people with the smart casual and formal wear will allow Hang Ten to leverage on existing knowledge of its counterparts in other countries such as Hang Ten Korea, where the product line is known for being more trendy.

Diversifications into a new market with new product- category extensions such as launching more products under the brand name- such as developing a new accessories line that will complement the current product range offerings. Other options of line extension include delving into surf wear and intimate clothing. However, we feel that these options might not be feasible because there might not be a demand from Hang Ten’s current target consumers for the line extensions.

Evaluation

Some of the advantages that Hang Ten can reap from the brand extensions are improving its brand image, provide consumers with more variety, and avoid cost of developing a new brand, as well as increase efficiency of promotional expenditure, where the company will only need to focus its promotional activities on promoting the new product.

Hence, we are looking into formulating growth strategies with brand extensions, targeting existing markets and new markets.  Look out for the next entry, where we will elaborate more on the selected plans!