Diversification is important for long-term success
In business, diversification means branching out into other product categories or industries. While this strategy does present some risks, diversification is often viewed as a safety net against downturns in a single industry or a way to grow your business by improving its sales and increasing its clientele.
If successful, diversification has many benefits, which is why it is considered essential for the growth of every business. There are a variety of ways in which you can diversify your products. These ways can include the following methods.
Expansion
An example of expansion could be a company that produces fashionable children’s shoes and diversifies its business to incorporate children’s toys. The two products have nothing in common, but as long as they are both in demand by the same consumer market, the company is sure to earn more sales.
Ancillary Services
To grow a business through diversification, companies often add additional services to existing products. For instance, a car manufacturing company can offer car maintenance and repairs. The concept of goods and services alongside one another can help create steady revenue. In our industry, the service we offer is hay testing to help properly determine the protein level that needs to be supplemented based on where the herd is in the stages of production.
Brand Extension
A brand extension also becomes easier with the help of diversification. Famous brands and established businesses can extend the range of products to gain more customers. Brand expansion is often quite profitable if the same standard and quality of the goods are maintained because brands usually have many loyal customers who will buy every product they introduce into the market. If you sell VitaFerm® Concept•Aid® mineral, then brand extension is easy with the tubs and with Cattleman’s Blend™ or Conserve™ in times of lower nutritional needs.
Addition of a New Line
Some businesses prefer to diversify by adding new lines. These lines may bring in a different type of customer or the same customer for another reason. The Backyard Boost® line fits the bill by bringing in most all of the public. Apparently, when times are tough, people want chickens. Chick sales go up during stock market downturns and in presidential election years.
The Vita Charge® line also fits. Vita Charge addresses specific challenges, and usually during a challenge people are more likely to spend money so having all of the products in this line readily available provides significant diversification.
Many of your customers likely own multiple species. If they have cattle, they probably have horses. If they have horses, they could also have dogs. Have you thought about how you can introduce Vitalize® to these customers? Read further into this issue for more ideas.
Just Do It
Considering the number of ways in which diversification can be used to expand and grow a business, it becomes clear that every booming business must eventually opt for diversification to survive and prosper.
