Diversification is a series of actions that take the company to expand its current operations with a new range of product or new services.
The types of diversification
A concentric diversification – diversification is introducing only minor changes to existing production technology or existing services. As a result, the company can hit the audience, which ignores the competition, or to people who previously was not interested in a product such as computer mouse for left-handed or dietary services for people suffering from anorexia.
A horizontal diversification – is to provide existing customers a new product, or any other variant of the existing product, e.g. a perfume manufacturer offering a new fragrance or bookstore offering customers coffee and cake.
Diversification conglomerates – offer a completely new, unrelated to previous products. It is directed to a new audience, sometimes the production of goods and services takes place under the same logo and linked to a lack of interest in the existing assortment.