The document discusses various expansion strategies for organizations, including concentration, integration, and diversification. Concentration strategies focus on intensifying the core business through market penetration, market development, and product development. Integration involves combining related activities, such as horizontal integration through mergers and acquisitions, or vertical integration along the supply chain. Diversification can be related, known as concentric diversification, or unrelated through conglomerate diversification into new industries.

1. Expansion
Strategies
Dr. Sandeep Kulshrestha

2. Types of Expansion strategies
Expansion through Concentration
Expansion through integration
Expansion through diversification
Expansion through co-operation
Expansion through
Internationalisation
Expansion through digitalisation

3. CONCENTRATION STRATEGIES
When an organisation focuses on
intensifying 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

4. IGOR ANSOFF’S PRODUCT-MARKET MATRIX

5.  Market Penetration - the firm seeks to achieve
growth with existing products in their current
market segments, aiming to increase its market
share.
 Market Development - the firm seeks growth
by targeting its existing products to new market
segments.
 Product Development - the firms develops new
products targeted to its existing market
segments.
 Diversification - the firm grows by diversifying
into new businesses by developing new products
for new markets.

6. 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

7. INTEGRATION STRATEGIES
Integration means combining
activities related to the present
activity of a company
Integration is part of the
diversification strategy
It widens the scope for a company as
far is the market penetration is
concerned.

8. TYPES OF INTEGRATION STRATEGIES
Horizontal Integration
Vertical Integration

9. 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
Mahindras

10. VERTICAL INTEGRATION
 Vertical Integration: Expansion to serve
its own needs. Vertical Integration is of
two types, namely Backward and
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)

11. DIVERSIFICATION STRATEGIES
Concentric or Related Diversification
Conglomerate or Unrelated
Diversification

12. 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)

13. Types of Concentric
Diversification
Marketing
Marketing- Technology- and
related related Technology-
concentric concentric related
diversification diversification concentric
diversification

14. CONGLOMERATE OR UNRELATED DIVERSIFICATION
A conglomerate is a Unrelated of two
Conglomerate or combination
Diversification
or more corporations engaged in entirely
different businesses that fall under
one corporate group, usually involving
a parent company and many subsidiaries
In other words, a conglomerate takes
up such activities which are unrelated
to the core business.

15. EXAMPLES OF CONGLOMERATES
TATA GROUP
ADITYA BIRLA GROUP
ITC GROUP
TTK GROUP
RELIANCE

16. ORGANISATIONS WHICH SELDOM DIVERSIFY
Public Sector Enterprises
Non Government Organisations
(NGOs)

17. REASONS OF DIVERSIFICATION
Minimizing Risk
Capitalize on Strengths
Provide a new perspective in business

18. Risks of Diversification
Unrelated diversification is complex
and confusing
Diversification demand a wide variety
of skills
Decreasing commitment on the core
business
Often results in losses
Increases the administrative costs