Today I had a discussion on Nokia's extension strategy with my peers and professor. Nokia wants to go for extension into rural markets. The million dollar question is how to decide on the extension strategy, that is whether to go for market development (getting in to rural market) or product development (and retain its bomb share in urban market).
Well, the answer is pretty simple. It depends on the company's core competencies. If a company wants to extend its markets, it must have a really strong distribution and logistics network. When later is the case, only then it can push its products to these markets with really poor infrastructure and connectivity.
For product development, a company must have hold on R&D and technology. If an organisation has intellectual resources and innovative temperament, only then it should go for the respective extension area.
Well, I personally think that Nokia has competencies in both logistics and innovation. As such, it is wise to go for product and market development simultaneously.
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