Vimal Co. Ltd. was earlier producing pencils, now they have decided to venture into the field of notebooks and paper. So they decided to combine with Classmate Pvt. Ltd. for the same and formed a new company 'Vimate Pvt. Ltd.'. Identify the type of expansion strategy.

Product Extension Merger

A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits. n this case, Vimal Co. Ltd. was producing pencils and is now venturing into the field of notebooks and paper by combining with Classmate Pvt. Ltd., which is already established in this market.