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