Business Insights: The Benefits of Diversification

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BUSINESS INSIGHTS: THE BENEFITS OF DIVERSIFICATION

Benchmark International

BUS I NE S S I NS IGHTS : T H E BENEF ITS OF DIVERS I F ICATION

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Diversification for business means entering new markets, developing new lines of products or services, or adding complementary services to help grow the business. By diversifying, businesses typically find they are able to increase revenue as they can reach a wider demographic.

DIVERSIFYING WITH C O M P L E M E N TA RY P RO D U C T RANGES

DIVERSIFYING THROUGH BRAND EXTENSION Some bigger companies diversify through brand extension, getting into areas they have previously been unknown for. When a brand is strong enough, it can often diversify into completely unrelated areas and make a success of it. An example of this would be the Virgin brand, which is today as well known for music and financial services as it is for transport.

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One of the simplest ways to diversify a product range is to add new products that are relevant to those the brand is already best known for. Examples would be a business known for selling men’s suits beginning to sell accessories such as ties and cufflinks, or a bakery adding a line of pre-prepared sandwiches.

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Diversification can also mean retaining the same product lines but expanding into new market s geographically. You can learn more about expanding into new markets by visiting the blog of Benchmark International.