We’ve all heard before that it’s never a good idea to put all your eggs in one basket. But, in business, should we follow this advice?
Diversification in business comes with risks and rewards. Some would rather not take the chances and remain focused on one perspective. This also has its advantages. By refusing to diversify, you build the value of your business and create a more referable brand. Your employees will be more efficient since they are trained to execute and will have the capacity to deliver the known product or service as opposed to trying to focus way
beyond their level of competence to control the extra stuff you have now diversified to.
Now, let’s focus on diversification. Many companies that started solely as the distributors of one product or service had to diversify in order to keep up with the times and prevent their business from flunking. Let’s take the Netflix company, for example. They were in the same category as Blockbuster and Video King, who are hardly remembered. These companies were all rental companies, but due to our technologically
advanced world, we went digital. Although they tried to claim their worth among the competition, they failed miserably. Netflix, on the other hand, realized the need to diversify to streaming. They are now one of the world’s largest streaming companies of television shows and movies which can be streamed on most devices. Here is where diversification worked! William Craig, contributor to the Forbes magazine said, “Diversification is about building new products, exploring new markets and taking new risks. But, as risky as it can be, it may also be a great way to maintain a
measure of stability.” Are you ready to diversify?
By Rae Dawn Brusch