Strategic Corporate Expansion

In: Business and Management

Submitted By nickimax
Words 1923
Pages 8
ABSTRACT

Growing liberalization and internationalization has led the firms to a race for expansion. Firms are more enthusiastic to trap new market segments than ever before. Expansion is an unpredictable, high-stacks game. The paper puts forth a Corporate Expansion Strategy to deal with such a scenario . Case studies have also been used to understand the expansion phenomenon. Efforts have been made to take a generic view of expansion which is independent of line of business, market segment, or type of expansion.

Expansion and investment are compared to have a clear understanding of how expansion for a firm and investment for a individual are similar to each other and how they differ with each other.

INTRODUCTION

Firms are attracted to capture the new liberalized market segments to pronounce their global existence and enhance their customer base. The literature emphasizes the points that should be discussed and resolved ,before making any decision regarding expansion. It is a design process for building a new set-up. Expansion involves various critical factors to be considered e.g risk of market, return from a new set-up, risk estimation, opportunity cost, expansion revision analysis , resource availability, dominant market study etc.
Expansion decision is a strategic decision which is related to firm's objectives and mission. To quantify the expansion benefits is a very complex process as analysis involves various intangible variables like brand-value, employment generation, forward and backward integration, bringing competition to the market etc. One can safely say expansion is a "strategic decision" which has an eye on market, competitors and future of the firm . Psycho-socio behavior also plays a very important role in taking expansion decisions.

Expansion Design process involves the following steps:

1.) Optimization of correlation-matrix
2.)…...

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