Why do companies not expand its business to other territories but diversify?reasons?

Diversifying is an excellent growth strategy, as it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins

1. Are not aware of growth opportunities
2. Are comfortable in their marked territories and do not find the need to expand
3. Lack foresightedness and are very focused on current goals

#1 is afraid of spreading themselves too thin of the computation, that is why diversifying of products is more safe.

It is simple to understand the reason behind this move made by many firms. They may have started as a firm that produces certain goods in their domestic market and meets that markets needs. In the external territories the firm has to consider the external territories needs and wants to survive the competition of the local traders and already existing firms in the industry who are meeting these needs.Best way to understand this would be if we used Mc. Donald's as an example where we can see in their local market they hardly serve any vegetarian food products. Whereas, in India they have Mc. Veg, Paneer sandwich, Potato Sandwich where they try to meet to the local needs of the external territories.