DIVERSIFICATION OF PRODUCT LINE AND/OR MARKETS Eric Anderson Anderson International Trading Why you should look into this. How you should look into this The benefits of diversifying products and markets served The disadvantages that could occur. Examples of success stories

Why diversify your product line? Increase profit Access to capital or excess capital? Existing office, sales staff, location Possibility of taking direct to market Take advantage of opportunities Products have life cycles, you must diversify

How to diversify into different products or markets Ask your suppliers what else they manufacture or could manufacture Can you take your general products, with a slight change, into another market? Ask your customer what they are looking for Employees or sales staff might have ideas Your manufacture or supplier might want to turn over a line to you, ASK!

Benefits of diversification Increase margins on existing and new product Take out the cyclical nature of current sales It can improve sales, productivity and cash flow Take advantage of your established business or brand

Disadvantages of diversification The name itself, you diversify, you become unfocused Must have a strong established company Time to plan and do market research Risky to switch to retail or go outside of your current market Current product line can suffer Can be capital intensive

Examples of diversifying Holiday window clings Tooling after market bicycle parts with existing CNC machining equipment Rotary die boards to curved plywood parts Using waterjet or laser to cut tile, light gauge sheet metal Designing and producing alternative to traffic cones using converting equipment