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Diversification Analysis Concept

In respect of the communication of Jan 31st, 2013 a few people have recently ask me to provide further explanation about the diversification concept. >> read the post <<

DiversificationWell, I have always been of the opinion that considerable diversification is often virtually forced on a company as it tries to maintain its position in a given field. I have seen that much of the research responsible for the development of opportunities for the production of new products is itself a response to the exigencies of competition. The same competition will force a company to take advantage of many of the opportunities thus created, not only to reduce costs and improve quality, but also to add new products. Whenever a company has an opportunity to add new products which, together with existing products, would enable it to serve a wider variety of needs of its customer, it will have an incentive to add them because the convenience to consumers may well give it an advantage over competitors and enable it to attract new custom apart from any inherent advantage of the product itself.

Giorgio Gastaldello, sales and marketing managerSimilarly to what I set out above, the combination of opportunities resulting from technological research and market standing may lead to diversification which is in the first instance a voluntary response to opportunities for the use of productive services and knowledge to better advantage. Such a diversification, once established, may create a customary and accepted relationship of complementarity in marketing which forces all other companies regardless of their particular productive abilities to conform.

Giorgio Gastaldello
Sales & Marketing Manager

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