Business - Business Expansion

• Expansion


  The process of growing or increasing the size, scope, or scale of a business
• Types of business expansion

  • Internal expansion (organic growth)
  • External expansion (integration)
• Internal expansion (organic growth)

  • Using internet platforms (e-commerce)
  • Opening new outlets (shops, factories)
  • Outsourcing tasks to third parties
• 1. commerce

  Selling products or services online, allowing 24/7 sales and lower costs compared to a physical store
• Pros of e-commerce

  • 24/7 sales
  • Lower costs (no need for physical premises)
• Cons of e-commerce

  • Technical issues
  • Need for website developers and maintenance
• Opening new outlets

  • Based on market research and expected increase in sales
  • Higher costs (staff, recruitment, training)
• Outsourcing

  • Contracting a third-party to perform a task or service
  • Potential for lower costs or higher quality
  • Loss of control over the outsourced task
• External expansion (integration)

  Mergers (two firms joining together) or takeovers (one firm buying another)
• Pros of external expansion


  • Faster rate of expansion
  • Accessing an established business
• Cons of external expansion

  • More expensive (cost of merger or takeover)
• Expansion can be driven by economies of scale (lower average costs as output increases) or diseconomies of scale (higher average costs as output increases)
• The choice between internal or external expansion depends on factors such as cost, speed of expansion, and level of control