Home > Innovations, Off the Box, Technology & Sales Strategies > Need to Diversify | Extending Organizational Competencies

Need to Diversify | Extending Organizational Competencies

Realigning the focus and diversifying has its distinct advantages in any situation and in any market. Diversification from the core provides an opportunity to create additional value to consumers and brings revenue opportunities without much of an ado. Diversification = Growth Strategy.

Market Realities: Organizations have evolved their practices and processes around native offerings; over years of exposure they accumulate strengths to further drill deep into the niche they offer. The vertical bore brings out more quality of service and matures business value. In such a space there will be  many a competitor in the same eco-system with much deeper strengths and maturity; Consumers are spoiled for choice among this competition. Business are cost leaders, have strong brand names, share customers, share characheristics, operate similar, compete nect to neck, share management techniques etc., The candidature sway can only be attributed to external factors like ads, verifyable case studies, consultant backing, customer referrals etc., and not really on ‘whats on offer’ as everyone offers almost the same with very little between. Prolonged existance and anchoring of organizations over the same service vertical will not be wise in the face of growing competition and the thirst to increase revenues.

Framework: Visual Verbatim to be appended

Diversifying from the Core’: When strategies are draw over diversification, there is always a choice. The choice of choosing to build based on your core competency and extend the diversified idea as an offshoot [or] get into a hyper mode by jumping from the native skin adapting in a different landscape altogether. Service companies can diversify from core and feel accomplished as risks are absolutely negligible, there is a strong possibility to utilize native resources over people and infrastructure. Investments and expertise can be applied across establishing a strong backup and support, vital to any new inception. Grade A corporate rung will have the choices to make when diversifying, anywhere down the ladder there is a strong pressure applied over GTM and Operational strategies which will in turn reflect upon exploiting existing relations rather than gearing to launch an all-out open market campaign. Tapping into existing relations will yield good results if you offer solutions and services extensions from the current anchoring. It makes great sense selling and in the conversions.

Pre-Requisites: Diversification can be successful if our core services are at the pinnacle of excellence. We would never want to look at getting caught with poor performance results over our core services; the focus then need to shift back to stabilize the platform from where bread is knead. Selling these ‘Value’ services will be done on the current ‘performance’ platform. Diversify for revenues, diversify over current excellence, when diversifying from core.

Success Factors: Product branding, selling – BD, strong process map, strong service delivery routines, open – case studies, clear engagement routines, leadership awareness.

Case Studies:
1. GE – Jack Welch transformed GE from a purely manufacturing company into a more diversified company. As a result of GE’s corporate strategy and complex diversification, in 1996, GE Capital Services earned US$4 billion. In 2005, GE services agreements increased to $87 billion, up 15% from 2004. In particular, financial services revenues increased 12% to $59.3 billion.
2. ITC – ITC’s non-cigarettes businesses continued to grow at a scorching pace, accounting for a bigger share of overall revenues. “The non-cigarette portfolio grew by 37.6% during 2006-07 and accounted during that year for 52.3% of the company’s net turnover,” an ITC release said. ITC was known for its Tobacco products predominantly, the decision to diversify boosted revenue.

Jesu Valiant

  1. April 4, 2011 at 6:03 PM

    I was studying some of your posts on this website and I believe this website is rattling informative ! Keep posting .

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