The major benefit of expanding into a new territory is the potential for greater sales.  By expanding the size of the territory in which you can sell, you make it possible to sell more of your (in this case) leather coats and belts.

The main risk is the risk of losing money.  You are probably going to need to expand your production to make enough product to sell in your expanded market.  It is possible that this will backfire.  You do not know for sure that there is going to be a good market for your products outside the local area.  If you expand production and cannot sell all of the new products you make, you will lose money.

The risk of expansion is losing money, the potential reward is more sales and therefore more revenue.

What are some possible local territories to which a company that sells leather coats and belts can expand its operations?You are working in a company that manufactures leather coats and belts, which it sells locally. The company is making reasonable profits. The senior management of the company believes that the local market will soon be saturated and wants to find new avenues for expansion locally within a year and internationally within a five-year period.

Let us assume that you are currently selling your coats and belts in your own storefront that sells only your products.  In that case, some local territories into which to expand could include:

• Other local specialty clothing stores.  You can try to get local clothes stores to carry your products, thus making them available to a larger population.
• Internet sales in the local area.  By putting your products online, you can make it much easier for potential new customers to get a good look at them.  You can then mail the goods or allow customers to come pick them up.
• Local branches of national stores.  This might be harder to accomplish, but you might be able to get such chains to sell your line of products as a special local product.