Thursday 12/June/2025 – 10:33 PM
In the world of business, expansion is one of the positive indicators of the company’s success, but the unwanted expansion may turn into a two -border weapon, which ultimately leads to catastrophic results, starting from loss of quality, passing through the collapse of reputation, and may end with the closure of the company itself.
The unwilling expansion is the rapid expansion of activities, branches or markets without providing adequate organizational or financial structure, and without conducting real feasibility studies or an accurate understanding of the targeted market, the motivation for excessive enthusiasm, or the pursuit of competition, or even fascination with temporary profits at the beginning of the project, may be a company in the United States that grows dramatically and expanded in opening many branches in a short period of time, without study Enough for consumer behavior, which led to a large financial burden and the loss of control of management and quality. The result was the bankruptcy of the company and the closure of more than 800 branches.
In Egypt, there was one of the largest construction companies in the Middle East, which has expanded strongly in several countries after the real estate boom, but it did not build a strong accounting system to manage this size of projects, and soon fell into financial problems that led to the declaration of liquidation in 2020.
There are also a lot of small restaurants that start with a remarkable success in a specific neighborhood, then its owner decides to expand in five branches at once “in the name of fame”, without preparing a good administrative structure, training employees, or unifying quality .. The result decreases the level of food and service, losing customers, then closed.
Random expansion
Random expansion causes great financial pressure, as the new branches mean rents, salaries and operating costs that the budget may not bear, as it causes weakness in control and quality, because the administration cannot follow all branches with the same precision, and leads to administrative exhaustion due to the absence of competencies, and may harm commercial reputation, as a bad experience in one branch affects the whole company, and the effort is distracted from the basic market.
Expansion is not wrong
The expansion is not wrong in itself, but rather a normal stage in the life cycle of any successful company, but it must be done according to clear criteria, the presence of a studied operating plan, financial readiness without total debt dependence, the experience of the business model on a limited scale first, and the construction of an administrative system that is managed efficiently, and an accurate understanding of the new market.
The real expansion of companies
Real expansion starts from within the company: from developing the work team, building strong operating systems, and experimenting with the ability to repeat the same quality, it is okay to succeed in one place for years, that is better than failure in ten places at once, the studied expansion makes money and global Brand, while random expansion is a brief path towards closing the company.
