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Marketplace Diversification

Activity Updates

 Winds of Change

Month of April

Diversification and Due-Diligence

Diversification may be viewed as an "art-form." Diversification involves stepping into a new environment. The amount of absolute change involved is likely to impact the risk/reward balance-ratio of the program.

At best, diversification is a difficult undertaking. The  key to the project's financial success is to maximize the reward while minimizing the risk. My experience notes one common shortcoming.  Rarely does a diversification plan, however complete, realize its projected targets.

 

The unexpected seems to occur. The two  key shortcomings of the planner are to underestimate COST and TIME,  typically, by 20 - 35 percent.

 

This is where due-diligence comes into play. The more market investigation the firm's management conducts the better the results in terms of strategic target realization.

Two noteworthy keys to conducting an effective market investigation Be thorough in the information-gathering stage. You will reap the reward for your extra efforts Assess the new venture from the customers perspective. Try to get into his/her buying shoes. How will they react to your entry into their lives.


Don't trust to wishful thinking to achieve a successful diversification outcome. Trust in due diligence.

Recent Items

 

Date: 2/22/19   

Item: Inflexible Strategy

Source: Wall Street Journal

 

Kraft Heinz Company just wrote down the value of Kraft Heinz Oscar Meyer brands by $15.4 billion. For the past several years KH has focused on cost-cutting (zero-based budgeting) to  improve profitability. But their lack of both investment in product development and  understanding of consumer buying-habit trends has caught up with them. The "cloud of opportunity" shifted as consumer preferences moved towards simpler ingredients and healthier foods. Kraft didn't follow.

 

Date: 1/24/2018

Item: Seasonal Diversification

Source: Wall Street Journal

 

Boeing Corporation is currently testing  self-flying  vehicle for urban transportation in the application form of air taxis. Uber,Technologies,  with its ride-sharing focus, is actively exploring this market

Timely Reflections

 

Tips

"Change favors the prepared mind"