BMGT 265 - Managing Strategically Capstone 5. Classify the following diversification strategies available to your Kayak on the Ansoff Matrix PRODUCT DIVERSIFICATION CASE: NETFLIX below: a. Kayak Refurbishment: Begin a new company that would refurbish kayaks. Because of Instructions: the increasing cost, it is felt that many Kayak enthusiasts would be interested in Read the Case rebuilding and refurbishing their current kayak instead of purchasing a new one. The Answer the questions below. NETFLIX cost would be $250,000 and the ROI is estimated to be in the 15-28% range with a Prepare to discuss in class medium risk factor. Competitor Purchase: Purchase a small Kayak producer that is currently competing in two of your markets. The firm is operated efficiently and its kayaks are well accepted Discussion in the markets. The owner wishes to retire and is asking $500,000 with liberal credit Prepare your responses to the following questions for class discussion: terms. ROI estimate 20-30% with a low to medium risk level. c. Training Facility: Open a training facility for Kayak students. The center would 1. What are Netflix' strengths over its competitors? Which of these strengths would you say is specialize in offering the training required to help beginners get started and a sustainable competitive advantage? professionals to compete at the highest level. The cost would be $250,000; ROI of Strengths Sustainable Competitive Advantage? 15-20% and risk factor is relatively low. Yes/No d. Kayak Distributor: Become the regional distributor for kayaks from various suppliers and earn a commission of 15% on all sales. The cost of establishing a regional Him distribution centre, inventory, and first-year marketing expenses is $500,000. The ROI could be negative or as high as 1,000% if successful. The risk factor is relatively high. 2. Read the following article: Diversification as a Marketing Strategy Existing Products New Products Market Penetration Product Development 3. What are the alternative growth strategies available to Netflix? Existing Products New Products Existing Market Penetration Product Development Markets Existing Markets Market Development Diversification Market Development Diversification New New . . Markets Markets 4. What are the pro's and con's of each alternative? Which of these would you select and why? Alternative Pro's Con's V