A good business decision or a bad business decision?

It seems to me that there are more and more businesses diversifying from their core business.

New start-up businesses become successful because they respond to a niche, they understand the niche and they provide a service or product which answers that niche’s problem. These businesses are successful for a variety of reasons it could be:

  • The way the service or product is delivered
  • the person that delivers that service or product
  • specific opening times
  • a specific understanding of that niche’s problems
  • plus many more…

What seems to be happening more and more is that the start-up business become successful because they truly understand the niche and deliver the service or product in a way that has never been delivered before.

It seems to me they then become greedy…

They think they are successful (and indeed they are) so they decide to expand, they widen their market, they diversify their product or service in an attempt to attract more people from their target market.

In actual fact what they do is dilute the very thing which made them successful in the first place. They dilute their USP – OUCH!

If it was a specific person that was delivering the service this becomes diluted as they expand and take on more team members. It may be a specific understanding of a particular problem of their target market which led them to be successful, do they really believe that they can have such a deep understanding of other areas of concern of their target market? I think not…

If you run a business and you are successful ask yourself what it is that truly makes you successful, work on this and enhance it. If you think of diversifying or expanding ask yourself “Am I diluting the very specific and unique thing that made me successful in the first place”?

Perhaps it’s greed, perhaps is a need to prove something else, perhaps it’s desperation… Who knows?

All I know is that these businesses don’t truly understand what their unique selling point is, if they did they wouldn’t be diversifying into such broad markets quite so readily!


What do you think?