Abstract

It has been pointed out in the service marketing literature that it is necessary for the growth of the service firms to expand their store network geographically. However, we still do not understand enough how firms should develop store network in the domestic market depending on their growth stage, because relatively little has so far been known regarding both how market expansion is categorized and how market expansion strategies are related to the corporate performance. The purpose of this research is both to classify market expansion strategies of service firms, especially what we would like to call “mini-box service retailers” which develop store networks with hundreds of outlets to cover geographic markets, and to clarify the relationship between their expansion strategies and economic performances by analyzing 52 Japanese food service companies listed in Japan. Main results are (1) market expansion strategies of mini-box service retailers were categorized into five types: Local Concentration, Proactive Expansion, Reactive Expansion, Concentrated National Expansion, Dispersed National Expansion, and (2) both Proactive Expansion and Dispersed National Expansion are found to be more profitable than Local Concentration.

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