Has the growth of your company stagnated? Learning about business diversification strategies will help you expand, offer new products and conquer new markets. Tatiana forero Aug 6, 21 | 10 min read what is a corporate diversification strategy The COVID-19 crisis put the operation of many businesses in check, especially those that had not started or consolidated their digital transformation process .In fact, after analyzing more than 120,000 companies in more than 60 countries, the World Bank concluded that sales fell an average of 27% between October 2020 and January 2021. In this context, diversification strategies are crucial to ensure the economic sustainability of companies in the short and medium term.

Even if your company was not affected by the pandemic, at some point you will have to implement a growth strategy to push the limits of your core segment and venture into new niche markets .If you got here it is because you are interested in knowing what market diversification is, right? In this article, Dominican Republic Phone Numbers List we will explain to you which are the 4 diversification strategies that will favor business growth, its advantages, risks and the role of Marketing in its planning. Without further ado, let's get started! What is business or market diversification? Business diversification, also known as market diversification, is a strategy that seeks to expand the potential market of a company with the creation of new products or services to expand into new markets .Diversification is one of the four main growth strategies of the Ansoff parent company , which consists of developing products or services to meet new consumer profiles.

In simple terms, it's about not putting all your eggs in one basket in order to minimize risk and increase business revenue. In a VUCA environment - volatile, uncertain, complex and ambiguous - deepened by the health crisis, companies are just taking the first steps in the productive and financial recovery from the “pandemic wounds”. This is where diversification strategies facilitate this recovery, as they help companies keep up with new market conditions. We are talking about reinventing ourselves or disappearing!4 types of diversification strategies According to the objective of your business, you can choose one of the 4 types of business diversification that exist. We will explain them to you in detail below.1. Related or horizontal diversification strategy The easiest way to penetrate new markets is with related or horizontal diversification.

This occurs when a company launches a product or service linked to its main activity. The peculiarity of this strategy is that there must be some compatibility between the new and old products . For example, it is common for the same resources, distribution channels , technologies, machinery, processes or knowledge to be used to take advantage of synergies between different products. One success story is PepsiCo . In 1931 they launched Pepsi, Coca Cola's iconic rival. However, in 1965 they began a horizontal diversification strategy when the company acquired Frito-Lay. With this move, PepsiCo added to its catalog different packaged snacks that complement the consumption of the soft drink.