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Expansion Strategies

1Types of Expansion strategiesExpansion through ConcentrationExpansion through integrationExpansion through diversificationExpansion through co-operationExpansion through InternationalizationExpansion through digitalization

2CONCENTRATION STRATEGIESWhen 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

3TYPES OF CONCENTRATION STRATEGIESMARKET PENETRATION Selling more products in the same marketMARKET DEVELOPMENT Selling same products to new marketsPRODUCT DEVELOPMENT Selling new products to the same market

Example:Bajaj Auto has undertaken all the above mentioned strategies

4INTEGRATION STRATEGIESIntegration means combining activities related to the present activity of a company

It widens the scope for a company as far as the market penetration is concerned.

5TYPES OF INTEGRATION STRATEGIES

6HORIZONTAL INTEGRATIONHorizontal 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

7VERTICAL INTEGRATIONVertical 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)

8DIVERSIFICATION STRATEGIESConcentric or Related DiversificationUnrelated Diversification

9CONCENTRIC OR RELATED DIVERSIFICATIONWhen 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)

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Conglomerate or Unrelated Diversification

Anunrelateddiversification is a combination of two or morecorporationsengaged in entirely different businesses that fall under onecorporate group, usually involving aparent companyand manysubsidiaries

UNRELATED DIVERSIFICATION

11EXAMPLES OF UnrelatedTATA GROUPADITYA BIRLA GROUPITC GROUPRELIANCE

12Cooperative StrategyCooperative strategy expresses the idea of simultaneous competition and cooperation among rival firms for mutual benefits .

Types of cooperative strategiesMergers and Acquisitions (Takeovers).Joint Ventures.Strategic Alliances.

Cooperative Strategies

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

InternationalizationA strategy through which the firm sells its goods or services outside its domestic market.

Reasons to having an international strategyInternational markets yield potential new opportunities.New market expansion extends product life cycle.Needed resources can be secured.

DigitalizationDigitalization 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 OrganizationsMost 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, emails, sms in medical fields, pharmacy etc.

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

Thank You !

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