A market options matrix was completed to come to this decision. The matrix offers different strategic options; market development, product development, market penetration and diversification. There are many possible ways of approaching these strategies but we are entering new geographical markets to identify new groups of customers. Taking this into account we will with the support of you, go forward with our plan of market development as this is the most beneficial way to move forward and maximise profitability. According to practice market development is a strategy of growth where a business seeks to sell its existing products into new markets. As a valued group of the entity that is H & M, we want to take you through the strategic reasoning behind this. We will run through how the strategic actions will be an advantage towards fulfilling our visions, goals yet also benefitting you as investors over the next three years. If you could all now please open the box placed in front of you and take out the piece of paper labelled with "Resource A". As you can see, it is a map which illustrates the four new markets in which we plan to open our first physical stores this year. 2015 will be a year of important advances towards fulfilling our international ambitions. The four new markets that H & M will be launching new stores in are India, Taiwan, South Africa and Peru. Although we understand that these new markets are geographically distant, there are strategic reasons behind each choice. .
Every strategic decision will have limitations and risks, however we have developed contingency plans for various situations. The market development strategy is considered to have a medium risk. This is due to the fact we are, realistically, entering unknown grounds. To counteract the risk, we as a company will do extensive research into the countries consumer bases and how to target them. Creating a strong brand presence is essential when penetrating new markets.
