A Business Encyclopedia

Expansion Strategy

Definition: The Expansion Strategy is adopted by an organization when it attempts to achieve a high growth as compared to its past achievements. In other words, when a firm aims to grow considerably by broadening the scope of one of its business operations in the perspective of customer groups, customer functions and technology alternatives, either individually or jointly, then it follows the Expansion Strategy.

The reasons for the expansion could be survival, higher profits, increased prestige, economies of scale, larger market share, social benefits, etc. The expansion strategy is adopted by those firms who have managers with a high degree of achievement and recognition. Their aim is to grow, irrespective of the risk and the hurdles coming in the way.

The firm can follow either of the five expansion strategies to accomplish its objectives:

Expansion Strategy

  1. Expansion through Concentration
  2. Expansion through Diversification
  3. Expansion through Integration
  4. Expansion through Cooperation
  5. Expansion through Internationalization

Go through the examples below to further comprehend the understanding of the expansion strategy. These are in the context of customer groups, customer functions and technology alternatives.

  1. The baby diaper company expands its customer groups by offering the diaper to old aged persons along with the babies.
  2. The stockbroking company offers the personalized services to the small investors apart from its normal dealings in shares and debentures with a view to having more business and a diversified risk.
  3. The banks upgraded their data management system by recording the information on computers and reduced huge paperwork. This was done to improve the efficiency of the banks.

In all the examples above, companies have made significant changes to their customer groups, products, and the technology, so as to have a high growth.

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Related pages

definition of guerilla marketingwhat is the black scholes modeloperating profit margin ratioguerilla attackwhat does leaseback meanbanking lockboxmeaning of deontologydeontology business ethicsentrepreneurship definition in hindithe substitution methodsampling distribution of sample proportionmeaning of speculatingconsumer equilibrium curveelasticity definition economicstraining and retraining of employeesdefinition cluster samplingdefine recruitment and selection in hrmpavlov and conditioningmeaning of cash reservecapital budget meaningassumptions of theory x and theory ywhat is the meaning of divestiturefive forces model of portergeocentrism in businessmeaning of critical path method4ps of marketing definitionsoluwadamilola meaninggive an example of ethnocentrismwhat is autocratic leadermotivational theory herzbergdefinition of capital budgeting in financial managementexample of rationingmeaning of divestiturewhat is scaling techniques in research methodologyhow to calculate fixed asset turnover rationonbank financial institutionsautocratic defchange agent competenciesrepo rate and reverse repo rate definitionneft batch timingexample of laissez-faire leaderdefinition of computerizationwhat is the meaning of revitalizetaylorism scientific management definitionprinciples of management henri fayoldefine autocratic leadership styledefinition of demand schedulenew pension system npsoligopolistic competition examplewhat is oligopoly market structureordinal utility assumptionscts definitioncomponents of compensation managementmax weber and bureaucracy theorydonkey carrotwhat is meant by job evaluationexplain profitability ratiosconsumer affluenceexplain income elasticity of demanddistinguish between accounting profit and economic profitdefinition of apprenticesturnover formula accountingbrand saliancespearman coefficientpoison pill stockporter's fiveflatter defmm theory of dividend policyspearman correlation formulafranchising definition marketingdeontological theory ethicssfa systemthe meaning of autocracyspearman's correlationquota sampling in statistics