Business diversification: types, strategies and typical mistakes
Posted: Sun Feb 02, 2025 6:48 am
What is it? Business diversification is when a company opens an additional direction for earning money. This can be a completely new development or an improved old one. Thanks to this, the company conquers an unusual sales market.
How to do it? First, you need to evaluate the reasons for the desire to diversify the market. Then you need to analyze the existing activity. And if there is money to conquer another market (develop a new product or improve an existing product), you can start making changes.
The article explains:
What does nigeria email list business diversification mean?
Pros and Cons of Business Diversification
Reasons to Diversify Your Business
Types of diversification
Types of diversification
Strategic Analysis of Diversification
Where to get money for development
Business Diversification Strategies
Characteristics of diversified and non-diversified companies
Tips for Business Diversification
Typical mistakes in business diversification
Features of diversification of small and large businesses
5 Scenarios for Using Neural Networks to Increase Website Profits by 40%
Download for free
What does business diversification mean?
In simple terms, business diversification is an entrepreneurial strategy that involves entering new markets and offering goods and services that are significantly different from the products of competing firms.
Most often, diversification in companies is used to achieve the following goals:
increase in profits;
reduction of economic risks;
bringing the enterprise out of crisis;
preparing for business synergy.
One of the most striking examples of this strategy is the Apple Corporation. The first Macintosh personal computer, which worked on the Apple I motherboard, was first released back in 1984. Later, the company released products specifically designed for this PC. That is, Apple initially operated according to the model of related diversification, which implies that all products manufactured by the enterprise are related to each other.
Growing competition between Microsoft and Apple led to a change in strategy: operational capacities were divided into several product groups, combined with each other within each group.
What does business diversification mean?
As a result, all of the company's products were linked together using iTunes, IOS and CarPlay.
This approach allowed Apple not only to bring the corporation out of crisis, but also to subsequently turn it into one of the largest enterprises in the market of computer and electronic devices, selling its products all over the world.
Another example of business diversification is Amazon, the largest company by capitalization in the market of e-commerce platforms and public cloud computing.
The first diversification in this corporation occurred in 1998, when such products as video games, electronics, software, children's toys, etc. were added to the online books sold on the platform. Over time, Amazon turned into a marketplace with a huge pool of products from various categories.
The second diversification occurred two years later, when the corporation became a full-fledged technology company. At this time, the Amazon Web Services cloud computing platform was born, as well as the Kindle e-book and the Amazon Echo speaker system. Around the same time, Amazon Air, its own airline, began operating.
How to do it? First, you need to evaluate the reasons for the desire to diversify the market. Then you need to analyze the existing activity. And if there is money to conquer another market (develop a new product or improve an existing product), you can start making changes.
The article explains:
What does nigeria email list business diversification mean?
Pros and Cons of Business Diversification
Reasons to Diversify Your Business
Types of diversification
Types of diversification
Strategic Analysis of Diversification
Where to get money for development
Business Diversification Strategies
Characteristics of diversified and non-diversified companies
Tips for Business Diversification
Typical mistakes in business diversification
Features of diversification of small and large businesses
5 Scenarios for Using Neural Networks to Increase Website Profits by 40%
Download for free
What does business diversification mean?
In simple terms, business diversification is an entrepreneurial strategy that involves entering new markets and offering goods and services that are significantly different from the products of competing firms.
Most often, diversification in companies is used to achieve the following goals:
increase in profits;
reduction of economic risks;
bringing the enterprise out of crisis;
preparing for business synergy.
One of the most striking examples of this strategy is the Apple Corporation. The first Macintosh personal computer, which worked on the Apple I motherboard, was first released back in 1984. Later, the company released products specifically designed for this PC. That is, Apple initially operated according to the model of related diversification, which implies that all products manufactured by the enterprise are related to each other.
Growing competition between Microsoft and Apple led to a change in strategy: operational capacities were divided into several product groups, combined with each other within each group.
What does business diversification mean?
As a result, all of the company's products were linked together using iTunes, IOS and CarPlay.
This approach allowed Apple not only to bring the corporation out of crisis, but also to subsequently turn it into one of the largest enterprises in the market of computer and electronic devices, selling its products all over the world.
Another example of business diversification is Amazon, the largest company by capitalization in the market of e-commerce platforms and public cloud computing.
The first diversification in this corporation occurred in 1998, when such products as video games, electronics, software, children's toys, etc. were added to the online books sold on the platform. Over time, Amazon turned into a marketplace with a huge pool of products from various categories.
The second diversification occurred two years later, when the corporation became a full-fledged technology company. At this time, the Amazon Web Services cloud computing platform was born, as well as the Kindle e-book and the Amazon Echo speaker system. Around the same time, Amazon Air, its own airline, began operating.