Once you have identified the opportunity to implement a diversification strategy, it is time to prepare the launch of a new product . This involves planning the roadmap that the company will take to design and promote the new line of business.
Go To Market (G2M) strategies facilitate the communication of the value proposition by structuring in detail the interaction that customers must have with the product to ensure a satisfactory experience from the first moment.
To achieve this, as a marketing professional you must answer 4 key questions:
- Who is your buyer persona?
- What are the features of your product that are relevant to your buyer persona?
- How are you going to promote the product to reach your buyer persona?
- Where are you going to distribute the product?
4. Creation of the multi-brand positioning plan
Now, if you pursue a horizontal or concentric ghana phone number list diversification strategy, your brands may compete with each other. The solution is to create unique brand identities and differentiated promotional actions through multi-brand strategies .
With this type of strategy, you can serve several market niches at the same time. By clearly establishing the value that each product represents for different consumers, you ensure the brand positioning of each line of business.
5. Content production to generate authority in new territories
Content marketing is one of the most effective ways to attract public attention, stand out from your competitors, and build authority in your industry. By producing content, companies can:
- pave the way for venturing into new territories;
- increase brand awareness ;
- foster consumer confidence in a brand;
- boost lead generation .
Benefits of implementing diversification strategies in your company
Reducing risk in times of crisis
One of the reasons why companies adopt diversification strategies is survival.
Relying on a single spearhead puts you in an extremely vulnerable position if new competitors, consumers with more complex needs , or unexpected contingencies appear on the playing field.
In this sense, diversification strategies prevent you from placing the weight of your company’s financial solvency on a single pillar , as they build a robust structure that protects you in the event that one of these pillars plummets.
Diversification strategies are even more relevant if your business is seasonal, as they will help you stabilize your sales throughout the year.
Access new lines of business at low cost
One of the characteristics of business diversification is the generation of synergies. With the experience, knowledge and technology that your company or your allies have, you can optimize the use of resources and promote progress towards new markets at a lower cost.
Reactivate the growth of your company
If your company only focuses on offering a limited range of products or services, you are closing yourself off to a finite group of customers. The goal is to eventually reach maximum market share, right?
Therefore, when your company has achieved this or if your products have completed their life cycle , business diversification will help you jump into a bigger tank to enter new markets and boost the growth of your business.
Potential risks of diversification strategies and how to mitigate them
Lack of experience in the new market
Although the goal of implementing a diversification strategy is to reduce risk, this move creates uncertainty for companies. In the end, they will enter markets they do not know, which requires a considerable investment of human and financial resources .
How to deal with uncertainty? The analytical work of the marketing team will be decisive in the initial phases of diversification. Conducting in-depth and objective market research will determine whether it is the ideal time to dare to conquer a new market.
Low relevance of the new product to the market
Being popular in an industry does not guarantee that your new launch will be successful. Therefore, investing resources in the development of a new product can be risky if it does not have the expected reception among consumers.
In fact, this is what happened to Nike in 2012. In an attempt at conglomerate diversification, the sportswear company launched the FuelBand, a fitness tracking device. However, the technology developed was not a match for Fitbit’s dominance. FuelBand was taken off the market two years after launch.
How to mitigate this risk? Make sure you know your consumers’ needs and expectations well before launching a new product, especially in highly competitive and specialized segments. Again, research is key to success.
Increased competition between brands of the same company
Another risk when establishing business is the content well develop? diversification strategies is creating two brands without a differentiated brand identity. It’s like putting two brothers in competition!
To avoid this, map out the specific pain points for each of your niches and create products that fit them perfectly. Complement this with actions to humanize the brands to give them a unique characteristic.
This is what Disney does with its different products such as Disney Channel, Disney XD, Star Channel, etc. Even its theme parks have different essences from each other. As you can see, Disney does not put its brands in direct competition, but rather manages them according to the tastes of its target audiences and makes them complementary.
Examples of companies with successful diversification strategies
Uber
The ride-hailing giant has implemented a changsha mobile phone number list horizontal diversification strategy by launching the Uber Eats platform. Although it addresses a different need, the company uses the same technological and operational resources to provide both services.
Samsung
Founded as a product import and export company, Samsung is now a successful case of conglomerate diversification strategies. Its various business lines include consumer electronics, biotechnology, construction, finance and mobile telephony, among others.
Moz
Moz started as a blog and online community where SEO specialists shared their research and insights. After transforming into a consulting firm, Moz branched out vertically and is now one of the most widely used SEO tools in digital marketing.