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Welcome to Innovate Africa With Dotun Adeoye

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

THE BLOG

Innovate Africa With Dotun Adeoye Every Sunday

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

Diversification

Diversification is strategic for growth in large businesses.  

Introduction

Diversification is vital for large companies with many divisions and products. The key to a large company’s success is diversification. A large company with only one product or market is a vulnerable target for rivals. Diversification helps management focus on core competencies rather than spread itself thin across multiple business areas. Diversification also allows cross-selling and upselling products from within the same organisation.

Increases revenue streams

 By diversifying, a company can access new revenue streams and reduce its reliance on its existing sources of revenue. This helps stabilise revenue and minimise the impact of market fluctuations.

Mitigates risk

 Large companies that operate in a single market or product face significant risks if that market or product experiences a downturn. By diversifying into new markets or products, a company can spread its risk and reduce its exposure to market fluctuations.

Capitalises on synergies 

Diversification can create synergies between different business units within a company. For example, a company that produces hardware and software can leverage its expertise in both areas to develop integrated products that provide more excellent value to customers.

Improves brand image

Diversification can help a company to improve its brand image by demonstrating its ability to innovate and adapt to changing market conditions. This can attract new customers and retain existing ones.

Expands market reach

By diversifying into new markets, a company can access new customers and expand its market reach. This can help to increase market share and drive growth.

Attracts new talent

 Diversification can create new opportunities for employees within a company and attract new talent interested in working for a dynamic and innovative company.

The key to a large company’s success is diversification.

The key to a large company’s success is diversification. Diversification allows a company to focus on its core competencies and grow profitably while simultaneously allowing it to maintain its competitive advantage in the market.

A large company with only one product or market is a vulnerable target for rivals.

A large company must diversify its business to grow and become more profitable. A large company with only one product or market is a vulnerable target for rivals. Diversification helps management focus on core competencies rather than spread itself thin across multiple market areas.

Diversification helps management focus on core competencies rather than spread itself thin across multiple business areas.

Diversification helps management focus on core competencies rather than spread itself thin across multiple business areas.

Diversification allows a company to focus its resources and efforts on what it does best rather than attempting to be everything for everyone.

The result is that management can concentrate its efforts on core competencies, such as marketing or engineering, while outsourcing other tasks not part of the core mission (such as manufacturing) or hiring outside firms specializing in those areas.

Diversification also allows cross-selling and upselling products from within the same organisation.

Cross-selling and upselling are two strategies a business can use to increase sales. Cross-selling is when you sell one product to a customer who is also buying another. For example, if you’re selling car insurance, you might offer your customer home insurance. Upselling is when you sell an upgraded product version to a customer who has already purchased something from your company. For example, if someone buys an iPhone XS Max but wants the XR because it has better battery life and facial recognition technology (which isn’t available on the XS Max), then this would be considered upselling since there’s no additional cost involved with selling them this new phone instead of their original choice.

Large companies need to diversify their businesses to grow and become more profitable.

Diversification is the process of expanding a company’s business into new categories. Diversification can help a company become more profitable, grow and protect itself from risk.

Diversification can also be used as part of an overall growth strategy for a large business to gain market share or increase revenue streams. For example, a large retailer might consider buying another retail store chain to expand its footprint within its home market or internationally.

Another reason large companies should diversify their businesses is that it will make them more competitive with other already diversified firms.

Bottom Line

A diversified business is a strong business. Large companies must diversify their businesses into multiple areas with different products, services and markets to grow and remain competitive in today’s market. This allows them to focus on what they do best while providing opportunities for cross-selling or upselling within the same organisation.

Who am I?

I am Dotun Adeoye, a Business Growth Strategist & Author

I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 30 years.

Today, I consult with businesses on how to sustainably grow their businesses, sustain infinite growth, and ensure business continuity irrespective of the business climate.

Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718 or dotun at dotunadeoye.com

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Innovate Africa

With Dotun Adeoye

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