A group of customers who buy defined products from a set of competitors. The business changes if either the competitors or the customer group changes. The business is the focus of strategy development.
In 1997, Owens Corning's acquisition of Fibreboard made the company a major seller of vinyl siding, which CEO called one of the "fastest growing products in the building-materials market." (Year 1997-SIC 1700)
Explanation: This is a new business for Owens Corning. The customers as represented by the channels of distribution are new. The product is new and the competition is new.
In 1993, as demand for tuna kept falling, the industry introduced fancier products. Unicord tested tuna laced with jalapenos, and introduced new Tuna Mix-Ins. Van Camp's introduced new tuna in canola oil. Heinz had new flavors in its Lunch Kit line. (Year 1993 -SIC 2000)
Explanation: This is the same business with new product varieties and price points.
In 1992, Healthy Choice targeted the health-conscious with new products. ConAgra succeeded by placing Healthy Choice in a separate category from its other brands, Banquet and Armour. ConAgra launched a lower-end frozen dinner line (Healthy Balance) as well as a higher-end health-oriented product (Ultra Slim Fast). (Year 1992-SIC 2038)
Explanation: Healthy Choice is a new business for ConAgra. It entered competition with health oriented competitors such as Weight Watchers. The consumers purchasing these new products were also different from those who purchased Banquet and Armour.
In the late 70s, Coors was a regional beer with high market share in the West. Its market share was relatively stagnant as Anheuser-Busch made great inroads into markets that Coors once dominated. In the 80s, Coors started a move to become a national brand. This strategy helped to increase its market share from 8% in 1975 to over 10% in 1990. The introduction of the low-end brand, Keystone, also aided Coors' growth. (Year 1990 -SIC 2082)
Explanation: This is an extension of the current business of Coors. The products remain largely the same. The customers, while new in geography, are the same type of customers they had been serving for some time. The competition was the same national competitors the company had been facing for years.
In 1988, Penske took over Detroit Diesel. Penske planned to supply engines for the 34,000 diesel-powered trucks in Penske's leasing operation. (Year 1988-SIC 3714)
Explanation: Penske is entering new business. The products are already established as are customers and competitors, but Penske is a new competitor to the market.
In 1994, Home Shopping Network announced it would launch another channel to sell brand-name merchandise. The channel became part of an increasingly crowded field of electronic retailers trying to appeal to affluent audiences. (Year 1994-SIC 4841)
Explanation: This is a new business for HSN. The products are new to it, the customers are different from the customers the company normally serves. And, it faces a new field of competitors.
In 1988, the introduction of "Brand Central" departments at 13 Sears stores in Indiana increased sales of appliances and electronic goods by more than 50% at some locations without hurting sales of the Kenmore house brand. (Year 1988-SIC 5311)
Explanation: This is an extension of the current business for Sears. The customers remain the same, the products are of the same type, and even the competitors are the same. The company is simply adding branded products to its appliance department sales.
In 1993, the drugstore industry was threatened by increasing competition from mass merchandisers who began to carry more health and beauty aids. Drugstores responded by including more food and household products, home delivery, and other services to fight back. (Year 1993-SIC 5912)
Explanation: The drug store industry is entering new businesses with new products, against new competition but selling to the same customers.
In 1998, Merrill Lynch was taking a strong stance against low-priced internet securities trading. This stance stood in contrast to another full-service firm, Morgan Stanley Dean Witter & Co., which operated internet unit, Discover Brokerage Direct, alongside its pricier full service operation. (Year 1998-SIC 6211)
Explanation: Morgan Stanley is entering a new business. The product is new, the key competitors are new and the typical customers are new.
In 1989, Vestron, a film distributor, began producing its own B-grade movies. It then bought fewer titles of independent films. But most video stores wanted to be supplied with the top hits. The move killed demand for the company's distribution services. (Year 1989 SIC 7812)
Explanation: Vestron entered a new business, with a new product against new competition, with same customers.