Diversification and expansion in business may form a key part of your business growth or can be a productive activity in changing markets to help offset downturns in one or more areas of your business and to help manage risk in business.
Types of diversification strategies include:
- new products into existing markets eg: a paper manufacturer diversifying into printers
- Modifying existing products into new markets eg: desktop computer manufacturer diversified into PC’s
- One company operating multiple entities
- Combining or taking on stages of production eg: retail company taking on manufacturing products you currently sell
These strategies all have their risks and advantages, so it is vital for the health and wellbeing of your business that you critically evaluate these and plan the best outcomes for you and your business.
Innovation can be part of your diversification strategy as it involves coming up with new ways to do things. You can be innovative and change processes or create more effective and products and ideas and take advantage of opportunities to expand products or services.
Innovation can help you save time and money. It’s also key to your business developing a competitive advantage and creating a culture of innovative thinking and problem solving.
You can be innovative without actually inventing something new!
Innovation can be:
- changing your business model
- adapting to changes in the environment to deliver better products or services
- experimenting with marketing
Planning your innovation strategy is the first step in your journey so finding the right support and guidance is essential for help to further develop your business, contact the Business LEAP team on 1300 249 482 for free business assistance and information.