The Meaning of Expansion: Understanding What Expansion Is and Some Types

Actually, what does expansion mean? This term is very often used in various fields of science, such as; economics, politics and physics. However, of course the word “expansion” has a general understanding which is the basis for its use in certain fields of science.

In this article I will explain concisely and concisely about expansion. Then, what will you learn from this article?

  • First, you will understand what expansion is, both in general terms and in certain fields of study.
  • Second, you will know several types of expansion in economics and business.
  • Third, you will know several types of expansion in business.

Then, what is meant by expansion?

The meaning of expansion is

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In general, the meaning of expansion is a process or action taken to make something bigger or wider. Etymologically, the word “expansion” comes from the Latin ‘ expandere ‘ which is absorbed into English, namely ” expansion ” (the basic word ” expand “) which means to spread.

According to the Cambridge Dictionary, the word expansion means an effort to increase in terms of size, number, and importance. In other words, the term “expansion” refers to an act of making a thing increase or increase.

Meanwhile, according to the Big Indonesian Dictionary (KBBI), the word expansion has several definitions, depending on the field of science or context being discussed. The following explains the meaning of expansion according to KBBI;

  • Economy: expansion is the process of expanding money into circulation.
  • Physics: expansion is the process of expansion (especially gas and steam), in which the gas expands when heated.
  • Politics: Expansion is the process of expanding a country’s territory by seizing me (in part or in whole) the territory of another country; regional expansion.

The Meaning of Expansion in Economics and Business

We have previously explained what expansion is, both in general terms and in several fields of science. Well, for novice business people, of course, need to understand this term, starting from the understanding and type of expansion in the economic and business fields.

A. Economic Expansion

In general, the meaning of expansion in the economic field is an effort made to increase economic activity and the growth of the business world.

Referring to the Bank Indonesia dictionary, economic expansion is economic development in a conjuncture pattern. In this case, the pattern of conjuncture is a process of ups and downs of economic progress and setbacks that occur alternately.

Usually the economic development is marked by an increase in prices, an increase in the amount of money circulating in the community, an increase in production, and an increase in consumption.

B. Business Expansion

In general, the notion of expansion in business refers to various activities to enlarge or expand a company’s business network, both in terms of production and in terms of distribution.

To complete the explanation of expansion in business, we need to refer to the opinions of the following experts:

  1. Financial Services Authority (OJK)

According to the FSA, the meaning of expansion is an activity of enlarging or expanding a business that is characterized by the creation of new markets, expansion of facilities, recruitment of employees, and others. Expansion can also be defined as an increase in economic activity and business growth.

  1. Bambang Riyanto

According to Bambang Riyanto, expansion is the process of expanding capital, both fixed capital and working capital in a company.

  1. Alex S. Nitisemito

According to Alex S. Nitisemito, the definition of company expansion is an attempt by the company to enlarge the size of the company (production capacity, market coverage) because of the increasing demand for the products produced.

  1. Suad Husnan and Enny Pudjiastuti

According to Suad Husnan and Enny Pudjiastuti, economic expansion is a process of business expansion by increasing factory capacity, adding new capital, adding production units, as well as mergers and acquisitions.

C. Market Expansion

Market expansion is an effort to explore new markets by a company with its products. This is done by reaching existing markets at new geographical points so new users get to know and use their products.

D. Credit Expansion

Credit expansion is an effort to increase the number of loan loans from banks.

Types of Expansion in Business

In the business sector there are several types of expansion undertaken by a company. The following is a brief explanation of several types of expansion:

1. Merger

A merger is a merger of two or more companies into one unit. This is one of the efforts to expand the business, where the dominant company will still maintain its identity, while weak companies will increasingly blur their identity.

2. Acquisition

An acquisition is a takeover of ownership of a company’s shares or assets by a group of investors. This type of expansion is usually done to maintain the availability of supply of raw materials or guarantee that the product will be absorbed by the market.

3. Hostile Take Over

Hostile Take Over is a form of acquisition of a company that is carried out by force. This expansion effort is carried out by opening bids for shares of companies that want to be controlled in the capital market at prices above market prices.

4. Leveraged Buy Out

Leveraged Buy Out is an effort to control a company by borrowing money (debt) to buy another company.

Conclusion

Thus a brief discussion about expansion , a term that refers to a process to be bigger or broader. From the above explanation we can understand that the use of the word “expansion” is widely used in several fields of science, especially in the fields of economics and business.

What do you think of the explanation of the meaning of expansion above? Is it clear enough or do you still need to add something?

Please provide your input in the comments column as material to improve this article. Hope it is useful, thank you.

 

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