Expansion through Concentration Strategy
Expansion through concentration involves attaining expansion by combining the resources in one or more area of the organization business. This is also known as focus or intensification strategy, implying that an organization would like to concentrate more on the business that it is already doing. It involves investment of larger resources in a product line for an identified market, with the help of a proven technology.
The expansion can be followed by adopting the following means:
three types of concentration strategy
Ansoff’s product- market matrix provides us three types of concentration strategy
- Market Penetration: Implies selling more products in the same market
- Market Development: Involves identifying the new markets for selling the existing products
- Product Development: Refers to selling new products in the existing markets
- Diversification- the firm grows by diversifying into new businesses by developing new products for new markets.
Examples of Expansion through Concentration
The examples of concentration strategies adopted by Bajaj Auto are as follows:
• Market Penetration: Selling more in urban centers
• Market Development: Selling to customers in rural areas
• Product Development: Selling various types of products, such as un-geared scooters and state-of-the-art motorcycles
The examples of concentration strategies adopted by Xerox India are as follows:
• Market Penetration: Offering print job service through multifunctional devices
• Market Development: Educating the small entrepreneurs to create new markets for its products
• Product Development: Launching several new office products, such as more sophisticated laser printers .