There are four types of growth opportunities for retailers: market penetration, market expansion, retail format development, and diversification. Market penetration focuses on increasing sales to existing customers. Market expansion employs an existing format in new market segments. Retail format development offers a new format to the same target market. Diversification involves a new format directed at an unserved market segment. Examples provided include Red Bull adding products, Dunkin' Donuts expanding locations, Scheels building a larger store, and Home Depot starting a wholesale business.

1. Growth StrategiesGrowth Strategies
Four types of growth
opportunities that retailers
may pursue

2. Four Types of Growth OpportunitiesFour Types of Growth Opportunities

3. Market PenetrationMarket Penetration
An investment opportunity strategy that
focuses on increasing sales to present
customers using the present retailing
format.
Red Bull
◦ Is adding to their products by now having a
Red Bull soda drink available.

4. Market ExpansionMarket Expansion
A strategic investment opportunity that
employs the existing retailing format in new
market segments.
Dunkin’ Donuts
◦ They have been gradually has been opening new
stores outside its northeastern U.S. stronghold. The
plan calls for Dunkin’ eventually to increase the
number of its U.S. outlets from current level of
more than 5,300 to 15,000 while also moving into
more foreign countries, including China.

5. Retail Format DevelopmentRetail Format Development
An investment opportunity strategy in which
a retailer offers a new retail format-a format
involving a different retail mix-to the same
target market.
Scheels
◦ They have built an new store in Rapid City, but they
are still targeting the same people and trying to
gain more customers at the same time. The store is
bigger with a wider selection and an indoor archery
range, laser shooting game, and a sports game.

6. DiversificationDiversification
A strategic investment opportunity that
involves an entirely new retail format
directed toward a market segment not
presently being served.
Home Depot
◦ Built a wholesale building supply business,
called HD Supply.

7. DiversificationDiversification
A strategic investment opportunity that
involves an entirely new retail format
directed toward a market segment not
presently being served.
Home Depot
◦ Built a wholesale building supply business,
called HD Supply.