Business diversification can pose risks - such as expensive delays and mistakes due to a lack of knowledge or understanding in the new area your marketing - but it can also curb the impact of changes in the marketplace. For example, if you supply a product or service that fails, it may leave you very vulnerable, but if you have two or more services or products and value of one drops, at least there will be income from the other. A problem could be if you diversify too quickly, and lose track or weaken your core. As a rule, diversifying with related products or services and selling them to a familiar client base is less risky than designing a product for a altogether new market.

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Diversification simply means that not all of your eggs are in one basket. Your funds are spread over a variety of investment instruments. For example, diversification could mean that you own several stocks but they all come from various types of industries. It could also mean that some of your investments are in stocks, but some are in bonds, some in real estate, etc. By having a variety of investments, your funds are more protected. If a certain sector of the economy is badly hit, you will have your other investments to 'take up the slack.' It is important because mutual funds offer the best bang for your buck when it comes to diversification. Because there is no limit on how many stocks may be included in a mutual fund, they have unlimited diversification possibilities.

robert kyiosaky also recomends to diversify, because in case something happens, your finances won't go down. like with this crisis. if you had all your money in real estate, now you'll be left with nothing

Diversification is very important to any business not just by dividing your investement but also 'diverse your clients'. This means that not to approach to only one certain gender or area (or whatever), because everything is depends solely on this.

Other business definitions of diversification could relate to having multiple product lines, multiple locations, or even a mastering variety of business skills to make yourself more employable in a down economy.

Diversification is very important in business. (Busninesswise) It means not putting everything you have on one project or one product line. Spreading resources in different venture or product line, so if one fail/dont sell you wont go bankrupt.

STRATEGY DIVERSIFICATION related diversification strategy expansion into similar products or services example: as a management consulting firm, GBIntel does (1) entrepreneurship (2) global entrepreneurship (3) international marketing, etc. unrelated diversification strategy expansion into unrelated products or services that do not mirror your core competence example: if your core competence is catering, you expand into shoe manufacturing INVESTMENT DIVERSIFICATION investing in several types of investments in order to maximize gains while simultaneously hedging loses ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.