Companies at the lower end of the market may want to enter the higher end. They may be attracted by a faster growth rate or higher margins at the higher end, or they may simply want to position themselves as full-line manufacturers. Sometimes, companies move up-market in order to add prestige to their current products, as when America's Chrysler purchased Lamborghini, the maker of exotic, hand-crafted sports cars.
An upward stretch decision can be risky. The higher-end competitors not only are well entrenched, but also may strike back by entering the lower end of the market. Prospective customers may not believe that the newcomer can produce quality products. Finally, the company's salespeople and distributors may lack the talent and training to serve the higher end of the market.
Was this article helpful?
As with any web site, SaleHoo has a number of features that will help you in buying products from around the world. Once you have an account on SaleHoo, which only costs a one-time fee, you can establish up to twenty named searches for products. After that, any time those items become available, you’ll be alerted.