TPO29 task6

Using points and examples from the lecture, explain two ways a company can diversify.



The first way for a company to diversify is to use existing technology to produce a new kind of products that need the similar technology and sell them to the customers who only need the new products. For example, a company that sells TV may use the technology of screen manufacturing to produce monitor for computers, and in this way it can expand its market by reaching the customers who don't need TV, but computers, like a company that needs to buy monitors for its employees. Another way is to create a new product and sell it to its existing customers who may have other needs. For example, a company selling skis may also produce ski-jackets and sell them to the consumers that have already bought their skis. Now that these customers must enjoy winter sports like skiing on snowy mountain, they will also need snow jackets to keep warm. And their preference of the ski brand will lead to their purchase of snow-jackets of the same brand. (168 words)


In the lecture,the professor talks about two strategies for companies to diversify their products in order to increase sales. The first strategy is to use the existing technology to develop new products. The professor gives the example of a television company. The television company also can produce computer monitor because the technology for both television and computer monitor is very similar. So the company can reach new customers by developing new products. The second strategy is to appeal to existing customers by new products. The professor gives the example of a ski company. The ski company must have a lot of customers who like skiing very much. So the company also can produce some ski jackets to meet these customers’ other demand. Because these customer are likely to buy the company’s ski jackets with the same brand.
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