Looking For Business Expansion? Consider These Factors

When you want business expansion, there are many factors to consider. business expansion competitors

Especially when you want the expansion in the right market to be profitable for your business.

The reason is because you will devote resources to get the growth and it will take some of your focus away from your current business.

Two factors among many need to be considered when you are looking at expanding the range of your products or services.

The factors have to do with potential competitors as they will have an impact on what you develop and the marketing you implement.

Too many competitors

A sign that a market may be viable is to enter one that has competitors. But trying to stand out in a crowded market is tough.

Unless you have a real difference with your product or service from potential competitors that mean something to customers it is difficult to gain sales.

The reason for this is if there are many competitors already in the market then you will need to work hard or spend big to compete against the noise they are currently making.

Also, you are unlikely to find much customer loyalty, as there is just too much choice for customers to select from.

Too few competitors

If there are only one or two competitors that dominate, again it is a difficult market to enter and make money with your product or service.

When markets are dominated by only a couple of brands it is very difficult to take customers away from them. One reason is that they usually have very loyal customers who have an emotional connection the brands.

If you decide you still want to compete in this type of market then be aware that any promotion you do will also benefit them as they are the leaders.

The reason is they have a higher awareness and loyalty than your product or service when you launch.

By researching the market you will be able to see if either of the two factors could limit the business expansion you are looking for.

As always, what are your thoughts about these two factors?
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14 Responses to Looking For Business Expansion? Consider These Factors

  1. Jeri says:

    It seems everyone under the sun wants to be a writer these days, which makes diving into the task of writing a novel quite daunting. I’ve been doing my homework via the trial and error approach. Just wish I could write steamy romances at breakneck speed, and then I might stumble onto some success even though it’s a flooded market…
    Jeri recently posted..Curse Words in Books: Yea or Nay?My Profile

    • Your area is indeed very competitive Jeri and I can understand that writing could be daunting. I am sure as you do your homework you will find the edge you need and we readers will be eager to read your novel :) I know I am not spoilt for choice via Amazon and added to the competitiveness is the low prices. Are steamy romances still big sellers?

  2. Susan,
    This post reads like a crib sheet for a lot of the marketing advice that I received when I launched my first two businesses. My first attempt was in a niche that had too much competition and I did not find a way to differentiate my services. In the case of the photography business (that my husband and I launched together), there wasn’t enough competition. The lack of competition meant that there wasn’t enough product awareness which proved to be a huge obstacle.
    Sherryl Perry recently posted..Top 10 of the Most Interesting New TechnologiesMy Profile

    • Your second example brings up a good point Sherryl and that is there needs to be competitors as they help the segment to build awareness, purchase etc and it doesn’t fall on your business only. Thanks for sharing your experiences.

  3. If we worried about too much competition, no one would ever start a business. The organic food chain Whole Foods opened about a block away from my regular supermarket a few months ago. I fretted that would be the end of my local market because Whole Foods is so popular. But my market is competing very nicely, thank you. They offer national brands (not offered by Whole Foods), have regular specials and aren’t as crowded.

    If open source developers gave up before they even tried Microsoft would still be the giant dominating the software business. Who ever thought Microsoft would be an also-ran?
    Jeannette Paladino recently posted..How a Tweet on Twitter Got Action (Finally) From a Social Care RepMy Profile

    • I am not saying you shouldn’t start Jeannette. Just to do your homework first and look at the market reality. I think there is a difference with your example, unless I have it wrong and that is your local supermarket was already established. I wouldn’t mind being a Microsoft also ran as they still make billions :)

  4. Catarina says:

    Not sure which is worst – too many or too few competitors, Susan.

    Read today about a browser called Rockmelt that took on Google Chrome, Bing and so forth. Needless to say it was short-lived. Taking on companies such as Google and Microsoft must be the ultimate folly. If nothing else, they make sure you fail. They sure have the resources to do so.
    Catarina recently posted..Would you survive a scandal?My Profile

    • In my experience when there are one or two dominating players it is very tough Catarina. You are right about them making sure you will fail and they have the resources. When I was with one multinational company and a new competitor was going to enter a market we implemented plans that made it too tough for smaller players to get traction.

  5. Geek Girl says:

    It’s really tough to know which end of the spectrum is better – too many or too few. Either way you to do the research.
    Geek Girl recently posted..What Are Fractals?My Profile

  6. You’re right, research is imperative and key yo making the right decision when one is looking to enter a new make, actually any new venture. The fact is, it’s never easy to do but armed with the information and good research you have a shot at making a success.

    When you mentioned the part about helping the competition in a close or limited market, I had to laugh. I have seen that way to often in my career. :-)