Capitalism Lab S03E04: Expansion
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Capitalism Lab S03E04: Expansion

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Expansion

In this episode, I begin to start my expansion to other industries. Going into 1 item for each Industry I need to dominate in was tricky. In hindsight, it would have been better to go to products where branding doesn’t play a huge role but if I recall correctly all of them get affected by branding.

Lessons learned during expansion:

1. Scout the next move

When going into a new market you need to think about a variety of aspects. As I am using range branding, I have 0 branding in the market. I only need 1 product to get my branding going which basically means that I have to pick a product that is the best option to sell. This means, I have to see which product is not available in the market, that would be the ideal scenario, the next step is to see which product is available but only in the ports. Hopefully, the quality difference is not too big between your product and the port and you can survive it until your brand catches up. Lastly, you want to look at products that have good margins. In other words, if you need to sell it cheap, you should be able to sell it cheap until your brand and R&D catches up.

2. Use one retail to advertise all ranges

It’s better to spend $500k in 1 retail store to advertise all of your product ranges than spending $500k per product range (from an economic point of view).

3. Be prepared to lose

As you may see, I was even selling an item for $0.01 as I was trying to remain competitive. As I have the snacks industry to support me, there is no issue for me to compete until my branding catches up.

What do you think? Leave a comment below 🙂

Also See: Toys & Gadgets Scenario

About Post Author

Capitalism Lab Story

Playing Capitalism Lab in my free time for fun.
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