We are surrounded by diversity all of the time. Mother Nature is probably creating and continuing to create the most diversity on the planet.
Here however we are looking at diversity in business what it involves and why we should consider embarking on what can be very radical decisions.
Breaking it down we have two basic sides to diversification in business:-
A business may develop new products within the market where it already works. For me this involved growing and developing Chamomile turf instead of selling only individual plants giving the customer a quicker, better product
This involves new ventures outside the known market. A business may buy into or outright another in a different but sometimes associated market.
So why should we “change direction” whether we operate concentrically or in a conglomerate market.
- Being different. Putting a business into another area of the market to stand it apart from competitors or to be recognised by customers.
- To manage risk. The market in which a business trades may be very competitive or risky in the sense that the market may change leaving a business exposed.
- Expand into new markets. An expansion into new areas of business may be necessary or it could be a natural progression.
- Sales of existing products or services may be under pressure. To survive, diversification in some form may be essential alternatively looking positively a successful business may wish to expand to make more money.
- Keeping up. If competitors have the edge in a market it may be necessary to move into other areas which have a better return financially. This is what we have tried to do at Bill White Nurseries hiring plants & lighting under our WyreHire banner.
- To put food on the table we need money and money comes from earnings within the business. Something we are all trying to achieve.
- Love and passion. As a business owner we are passionate about what we do and natural progression by expansion and diversification creates challenges and demands which most managers take on and enjoy.
To sum up diversification may be necessary, essential, enjoyable and rewarding however a note of caution not all changes may work. Before entering a new market having researched it thoroughly look at the potential for loss if something goes wrong and ask can I survive it.
Bill White, Bill White Nurseries