Market Expansion

Definition

Market expansion refers to the strategy of entering new markets or increasing the market share in existing markets to boost economic growth and profitability. This process often involves seeking out new territories or regions, driven by the pursuit of new resources, potential customers, and opportunities for investment.

5 Must Know Facts For Your Next Test

1. During the 19th century, European powers sought new markets as a response to overproduction and increased competition among industrialized nations.
2. Market expansion was often justified by the belief that it would bring civilization and progress to 'backward' regions, intertwining economic interests with cultural motives.
3. The quest for new markets led to increased colonization, particularly in Africa and Asia, where European powers established control over resources and trade routes.
4. Economic motivations behind market expansion contributed to global inequalities, as colonized regions were often exploited for their resources without equitable returns.
5. The drive for market expansion was a key factor that fueled tensions among European nations, leading to conflicts such as the Scramble for Africa and eventually World War I.

Review Questions

• How did market expansion influence European imperialist policies in the 19th century?
  • Market expansion significantly influenced European imperialist policies as nations sought to acquire new territories to secure resources and access new customer bases. The need for raw materials for industrial production and markets for finished goods prompted countries like Britain, France, and Germany to establish colonies across Africa and Asia. This pursuit of economic gain was often coupled with a sense of superiority, justifying imperialism as a means to civilize 'less developed' regions.
• Analyze the relationship between market expansion and the Industrial Revolution in shaping global economies during the 19th century.
  • The Industrial Revolution created a surge in production capabilities, resulting in surplus goods that necessitated finding new markets. This relationship drove European powers to look beyond their borders for both raw materials needed for manufacturing and outlets for their products. As a result, market expansion became a crucial component of industrial growth, transforming global economies by integrating colonial markets into the capitalist system, which reshaped trade patterns and economic interactions worldwide.
• Evaluate the long-term impacts of market expansion on former colonies and their economies in the 20th century.
  • The long-term impacts of market expansion on former colonies are profound, often leading to economic dependency on former colonial powers. Many regions were left with economies structured around exportation of raw materials while lacking diversified industries. This created vulnerabilities that persist today, as many nations continue to grapple with underdevelopment and reliance on external markets. Moreover, the legacies of inequality and exploitation established during the era of market expansion have contributed to ongoing social and political challenges within these countries.

Related terms

Colonialism: The practice of acquiring control over another country or territory, often involving the establishment of settlements and economic exploitation.

Industrial Revolution: A period of significant industrial growth and technological advancement during the late 18th and early 19th centuries that transformed economies and societies in Europe.

Economic Imperialism: A form of imperialism where a country exerts control over another through economic means rather than direct political control.