Understanding the challenges of diversification

Most companies that have historically operated around a single product or product range find that, in order to achieve growth, they have no choice but to diversify. Indeed, in mature markets, product innovation – although necessary – often only enables companies to survive and maintain prices, and rarely to offer a value-added difference. As price/mix leverage has its limits, there is a risk of seeing sales slowly decline over time, while maintaining a respectable margin. This is the case for many large groups. They die slowly and richly, but they will inevitably disappear if they do nothing. To survive and continue to grow, they are forced to question their "where to play", to reinvent themselves and to venture beyond their usual territories.

As numerous studies have shown, even if organic growth in core businesses remains the preferred option, companies are also turning to external growth in other markets, in search of diversification opportunities.

This fact sheet describes the steps you need to take to tackle the issue of diversifying your organization.