Course 201: Understanding a Business
Market Penetration
In this course
1 Introduction
2 Barriers to Entry
3 Price Elasticity
4 Substitutes
5 Capital Intensity
6 Market Penetration
7 Regulation

If you start a business, you want a plentiful supply of untapped customers waiting for you and your products. Philip Morris MO is selling cigarettes hand over nicotine-stained fist in the developing world. That's why it is able to grow despite a saturated U.S. market for smokes. Chewing-tobacco maker UST Inc. UST, on the other hand, focuses solely on the U.S. market and thus has no growth outlets. Once companies saturate their markets, cyclicality sets in. Sales rise when times are good. They fall when times are bad. Starbucks is nowhere near saturating its markets. There's plenty of room to expand in the United States and huge potential overseas.

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