Expansion

Strategies

Types of Expansion strategies

Expansion through Concentration
Expansion through integration
Expansion through diversification
Expansion through co-operation
Expansion through
Internationalization
Expansion through digitalization

CONCENTRATION STRATEGIES

When an organisation focuses on

increasing its core businesses with a
view on expanding through either
acquiring a new customer base
or
diversifying its product portfolio, it is
having a concentration strategy

TYPES OF CONCENTRATION STRATEGIES

MARKET PENETRATION Selling more

products in the same market
MARKET DEVELOPMENT Selling
same products to new markets
PRODUCT DEVELOPMENT Selling
new products to the same market
Example:
Bajaj Auto has undertaken all the above
mentioned strategies

INTEGRATION STRATEGIES
Integration
means
activities related to
activity of a company

combining
the present

It widens the scope for a company as

far as the market penetration is
concerned.

TYPES OF INTEGRATION STRATEGIES

Horizontal Integration

HORIZONTAL INTEGRATION
Horizontal Integration
When an organization takes up the
same types of products at the same
level of production or marketing
process, it is said to follow a strategy
of Horizontal Integration (Also known
as Merger/Acquisition)
Example: Takeover of Satyam by
Mahindra's

VERTICAL INTEGRATION
Vertical Integration:
Expansion to serve its own needs. Vertical
Integration is of two types, namely
Backward
Forward Integration
- Backward Integration means going back to
the source of raw materials
(Example: A Thermal power company may do
coal-mining)
- Forward Integration implies moving
closer to the finished product (example: A car
spare parts manufacturer would start
manufacturing passenger cars)

DIVERSIFICATION STRATEGIES

Concentric or Related Diversification

Unrelated Diversification

CONCENTRIC OR RELATED DIVERSIFICATION

When an organization takes up

related activities within a wider
industry situation, it is termed as
Concentric Diversification
Example:
A sewing machine manufacturer starts
manufacturing Kitchen appliances
(Wider Industry situation Women as
concentrated target group, Kitchen
appliances as concentrated product
range etc)

UNRELATED DIVERSIFICATION
Conglomerate or Unrelated Diversification

An unrelated diversification
is
a
combination of two or more corporations
engaged in entirely different businesses
that
fall
under
one corporate group,
usually involving a parent company and
many subsidiaries

EXAMPLES OF Unrelated
TATA GROUP
ADITYA BIRLA GROUP
ITC GROUP
RELIANCE

Cooperative Strategy
Cooperative strategy expresses the
idea of simultaneous competition and
cooperation among rival firms for
mutual benefits .
Types of cooperative strategies
Mergers and Acquisitions (Takeovers).
Joint Ventures.
Strategic Alliances.

Cooperative Strategies
MERGERS

 Example :
merger : Tata steel with Corus
takeover: Microsoft took over Nokia
Joint venture:
Apollo Tyres +
Continental AG Germany = Tyre
manufacturing facility in Malaysia.
Strategic alliance: Cisco and Wipro Ltd

Internationalization
A strategy through which the firm sells its goods
or services outside its domestic market.
Reasons to having an international
strategy
International markets yield potential new
opportunities.
New market expansion extends product life
cycle.
Needed resources can be secured.

Digitalization
Digitalization is defined as digital coding of
information and the growing productivity
gains in processing and transmission
Digitalization is a combination of various
areas of Business, Social Sciences and
Technology.

Digitalization Strategies in Indian Organizations

Most banks in India converted from traditional

Banking to High-tech Banking. (ATMs, Internet
Banking, TeleBanking, Mobile Banking etc.)
Conversion of paper documents to e-documents.
(Bills, Receipts in E-form in insurance companies etc.)
Communications through teleconferencing,
sms in medical fields, pharmacy etc.

emails,

E-portal pattern in Railways(IRCTC), Airlines etc.

Thank You !