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Which marketing strategy for expanding sales revenue presents the most risk for an organization?

User Pana
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Final answer:

The most risky marketing strategy for an organization looking to expand sales revenue is conducting an IPO, due to the high risks associated with attracting investors for unestablished companies. Aggressive sales force expansion without oversight can also present risks such as fraud and damage to reputation. In a perfectly competitive market, aggressive advertising might not yield long-term benefits.

Step-by-step explanation:

The marketing strategy that presents the most risk for an organization when considering expanding sales revenue is the rapid expansion through the issuance of public stock, known as an Initial Public Offering (IPO). While an IPO can provide a substantial influx of capital, the process is fraught with risks. For a small company that is not yet well-established, the stock may not attract much investment because of the perceived risks. Furthermore, inadequate management of the expansion can lead to overextending the company's resources and exposing it to failures in safeguard mechanisms, resulting in possible financial ruin and damaged reputation.

Another high-risk strategy that some organizations may use in an attempt to boost sales revenue is aggressive expansion of sales force and territories without proper oversight. Without proper controls, sales representatives could misuse their authority, leading to fraud and a tarnished brand reputation, which can ultimately hinder a company's success. Therefore, these methods can be risky and may not be the best approach for a company seeking sustainable growth.

In a perfectly competitive market, an aggressive advertising campaign could potentially increase sales in the short term. However, considering the nature of such markets, where products are largely homogeneous and competitors can quickly copy strategies, the long-term benefits may be minimal and the costs could outweigh the returns.

User Goddchen
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