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CPR Level Up series: How-to-Expansion Method Overview

Updated: Jun 2

The rise and fall of economic growth on a macro or micro level is never a completely random, unexplainable phenomenon; instead, what goes up is more organic and is likened to the law of gravity that states "what goes up, must come down." This is true for the economy, including businesses. The constant of a forever upward does not exist; hence, the trajectory does not exist; hence, when a leader plans, the leader must have a more holistic perspective of the economy, the industry, and the business. Known as the business cycle, the economy's cycle includes expansion, peak, contraction, and trough.

Today's post will consider business expansion at the micro level, which affects local and national businesses, not the general economy. Last week, CPR provided insight on steps to expand one's business, including the expansion method. ‍The correct expansion method is crucial for businesses that want to grow and increase their market share. The four main expansion methods are market penetration, market development, product development, and diversification.

1. Market penetration

The objective of market penetration is to maximize the use of existing resources and gain a larger share of the existing market. limited expansion resources

Market penetration is a good strategy for businesses established in their market that have only limited resources for expansion.

2. Market development

This method involves identifying new customer segments or geographic regions to sell existing products or services. The goal is to expand the business’s reach and increase sales by tapping into new markets.

Market development can be great significant for businesses with a potentially disloyal customer base. By expanding into new markets, companies can rely less on their existing customer base and diversify their revenue streams.

3. Product development

The goal of product development is to increase sales and market share by offering customers innovative and new products that meet their changing needs and preferences.

Product development can be an excellent strategy for businesses looking to differentiate themselves from competitors and attract new customers.

4. Diversification

Diversification is a growth strategy that involves expanding a business into new markets or industries. Diversification of either type can be a high-risk, high-reward strategy.

Expanding into new markets or industries allows growing businesses to rely less on existing products or services and diversify their revenue streams.

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