Finance Director & Accountant Cambridge

Key questions a business should ask itself before diversifying.

Considered responses to these key questions will greatly improve the chance of a successful diversification strategy.

Financial analysis drives many companies to diversify. Proper analysis is definitely necessary, but there are six key questions that should be asked and answered!

1. What does our business do better than any of its competitors in its current market?
2. What assets and skills are needed for the business to succeed in its new marketplace?
3. Can we really match or, better still, outperform the competition in its existing ‘home’ marketplace?
4. Will diversification result in a break-up or disruption of existing assets which are best retained in their current state?
5. Will we be simply another business in a new market, or can we become the winner?
6. What will the business learn from diversification, and is it sufficiently  organised to make the most of the opportunity?