Expansion Strategy Definition
The dynamic business environment demands continuous change in the business practices. It is in the terms of customer functions and groups and alternative technologies to broad the expansion scope. Whenever an organization aims at high growth, expansion strategies are always followed. In other words, it will be true to say that market expansion strategies are adopted whenever a business wants to expand its activities. The general concept of expanding business is to sell your products to new groups of the potential customers. Usually there are two ways to expand market share. These are:
- Introduce more products to the market enabling you to access multiple customer databases.
- Make use of your products that are particularly popular.
Offering more Products
Introduction of new products in the market raises the sales to an impressive point. For example last year if you offered ten products and this year you will be offering 20 products then your sales will rise up twofold indeed. It does not happen that your new product may generate large revenues at once. It is because people will take time to create awareness about the new launch and then will make decision to make the final purchase or not. Another way can be to innovate, your product or come up with a product in a way that no one has ever done earlier. For this you will have to make use of the creative side of your company and come up with something that is already you are dealing in with. Never offer a product that is not related to whatever you are already selling.
Riding Bestseller to the Top
Bestseller is the product that sells multiple times. An outstanding bestseller is the one that achieves more than normal level of production. Do some research and find out that which product has more potential in the market. Try a number of alternatives and finalize the product that has the largest sales growth.
Types of Expansion Strategies
There are several other ways of business growth strategies. They are as follows:
- Expansion via concentration: This is the type of expansion strategy where businesses invest in resources towards a particular product line with proven technology facilitation. Using market penetration strategies, the firm may focus on existing market or existing products may be offered new segments of customers. Moreover it can also be done by offering new products for the existing customer database.
- Expansion with the help of integration: This is done by expanding the scope of the business by serving the same set of customers.
- Expansion through mergers, acquisition and strategic alliances: In this way two companies syndicate their core competencies, resources and capabilities to look forward for the mutual benefits.
- Begin a chain: There are some businesses that can be easily replicated and turned in to a chain. For example retail stores, restaurant, bars etc. Take a close look at what made your original store successful and follow the same rules for your chain. New campaign can be initiated every time you open a new branch.
In short the above mentioned are the ways how to expand market shares. At times businesses employee only one expansion strategy while sometimes a combination of business expansion strategies is used. Situation and need varies business to business.