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Expansion

StrategiesDr. Sandeep Kulshrestha



Types of Expansion strategies

Expansion through Concentration

Expansion through integrationExpansion through diversification

Expansion through co-operation

Expansion throughInternationalisation

Expansion through digitalisation



CONCENTRATION STRATEGIES

hen an organisation focuses on

intensifying its core !usinesses "ith avie" on expanding through eitherac#uiring a ne" custo$er !ase ordiversifying its product portfolio% it is

having a concentration strategy



IGOR ANSO&&'S (RO)*CT-+AR,ET +ATRI



+ar.et (enetration - the firm seeks to achieve

growth with existing products in their currentmarket segments, aiming to increase itsmarket share.

+ar.et )evelop$ent - the firm seeks growthby targeting its existing products to new marketsegments.

(roduct )evelop$ent - the firms develops newproducts targeted to its existing marketsegments.

)iversification - the firm grows by diversifyinginto new businesses by developing new productsfor new markets.

http://www.quickmba.com/marketing/market-share/

http://www.quickmba.com/marketing/market-share/



T/(ES O& CONCENTRATION STRATEGIES

+AR,ET (ENETRATION 0 Selling $ore

products in the sa$e $ar.et+AR,ET )E1E2O(+ENT 0 Selling

sa$e products to ne" $ar.ets

(RO)*CT )E1E2O(+ENT 0 Sellingne" products to the sa$e $ar.et

Exa$ple3

4a5a5 Auto has underta.en all the a!ove$entioned strategies



INTEGRATION STRATEGIES

Integration $eans co$!ining

activities related to the presentactivity of a co$pany

Integration is part of thediversification strategy

It "idens the scope for a co$pany asfar is the $ar.et penetration isconcerned6



T/(ES O& INTEGRATION STRATEGIES

7ori8ontal Integration

1ertical Integration



7ORI9ONTA2 INTEGRATION

7ori8ontal Integration3 hen an

organi8ation ta.es up the sa$e typesof products at the sa$e level ofproduction or $ar.eting process% it issaid to follo" a strategy of 7ori8ontal

Integration :Also .no"n as+erger;Ac#uisition<

Exa$ple3 Takeover of Satyam byMahindras



1ERTICA2 INTEGRATION

1ertical Integration3 Expansion to serve

its o"n needs6 1ertical Integration is oft"o types% na$ely 4ac."ard and&or"ard Integration

- 4ac."ard Integration $eans going

!ac. to the source of ra" $aterials:Exa$ple3 A Thermal power company may

do coal-mining<

- &or"ard Integration i$plies $oving

closer to the finished product :exa$ple3 A car spare parts manufacturer would start manufacturing passenger cars<



CONCENTRIC OR RE2ATE) )I1ERSI&ICATION

hen an organi8ation ta.es up

related activities "ithin a "iderindustry situation% it is ter$ed as=Concentric )iversification>

Exa$ple3

A sewing machine manufacturer startsmanufacturing Kitchen appliances

(Wider ndustry situation ! Women asconcentrated target group" Kitchenappliances as concentrated productrange etc#



Types of Concentric Diversification



Conglo$erate or *nrelated )iversification A conglo$erate is a combination of two

or more corporations engaged in entirelydifferent businesses that fall under onecorporate group, usually involving a

parent company and many subsidiaries

In other "ords% a conglo$erate ta.esup such activities "hich are unrelated

to the core !usiness6

CONG2O+ERATE OR *NRE2ATE) )I1ERSI&ICATION

http://en.wikipedia.org/wiki/Corporation

http://en.wikipedia.org/wiki/Corporate_group

http://en.wikipedia.org/wiki/Parent_company

http://en.wikipedia.org/wiki/Subsidiaries

http://en.wikipedia.org/wiki/Subsidiaries

http://en.wikipedia.org/wiki/Parent_company

http://en.wikipedia.org/wiki/Corporate_group

http://en.wikipedia.org/wiki/Corporation



ORGANISATIONS 7IC7 SE2)O+ )I1ERSI&/

(u!lic Sector Enterprises

Non Govern$ent Organisations:NGOs<



REASONS O& )I1ERSI&ICATION

+ini$i8ing Ris.

Capitali8e on Strengths(rovide a ne" perspective in !usiness



Ris.s of )iversification

*nrelated diversification is co$plex

and confusing)iversification de$and a "ide variety

of s.ills

)ecreasing co$$it$ent on the core!usiness

Often results in losses

Increases the ad$inistrative costs



Thank You !

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