Develop new business areas, build on existing strengths
Diversification opens up further opportunities for business development and can reduce dependence on individual markets or customer groups. The key is to identify new business areas that fit the company’s capabilities, resources and long-term objectives.
Not every new opportunity makes a sound strategy
Existing technologies and capabilities can provide access to different business areas. The right direction depends on market attractiveness and the company’s ability to succeed.
Four questions for successful diversification
The decision to enter a new business area should not depend solely on market trends or technological possibilities. Four perspectives help inform the assessment.
What can we build on?
Analyse technological capabilities, customer insight and existing competitive advantages.
Where are new opportunities emerging?
Identify attractive applications, business models and emerging customer needs.
What can we successfully deliver?
Assess the capabilities, investment, partnerships and organisational foundations required.
How can we manage the risks?
Consider commercial risks, dependencies and the implications for the existing business.
From an idea to a new business area
I help companies systematically assess potential directions for development and make informed decisions about new business areas.
Develop options
Review existing strengths, examine market changes and identify potential business areas.
Set priorities
Weigh up market opportunities, the company’s capabilities and resources, and the risks to select suitable directions for development.
Establish new business areas
Plan market entry and implementation, support the initial steps and incorporate lessons learnt into further development.