Critque of Unique L.'s "Specialization vs. diversification"

Hope everyone’s having a good day today, and if not, it’s about to be. Luckily for you, I’ve been checking out all the different blogs out there and came across one that’s, let’s just say, unique. Actually, that’s just a corny play on words since the blog I am critiquing is Unique L.’s. The link for her site is http://uniquebl0gs.blogspot.com/ and I will certainly recommend it to everyone I know, it is really that good. The specific blog that interested me was titled “Specialization vs. diversification” and wouldn’t you know it, that’s what it was about. Unique made the argument that specialization allows for greater efficiency. While that may be true, if a company is thinking big, diversification is a must. Here’s my take on the topic.

Diversification in a market is more beneficial to a company’s success than specialization because it allows for a greater possibility of satisfying broader markets with a more diverse base. Diversification allows you to earn more profits from channeling different avenues sparking the buyer interest in product they rarely find through specialization. Specialization is risky because if the niche is not successful the entire business fails to produce a “backup”. Competition is greater with specialization carrying the risk of failure in the market opposed to diversification.
http://www.greensheet.com/gs_online.php?issue_number=071002

Many strategies are associated with successful diversification. I believe that capitalizing on core competencies is the most important because it relieves the threat of competitors by forming a competitive advantage. For instance, Coke offered a diverse product Coke Zero which created a different market for no calorie drinks, diversifying their product (Coke, Diet Coke), extending a value of taste similar to regular Coke feeding the market’s desire for healthier soft drinks. If Coke focused on specialization of their one product, Pepsi and other competitors would have depleted that specific “health” market.
http://www.1000ventures.com/business_guide/im_diversification_strategies.html

Diversification allows for a smaller need of reinvention of the product because of the lesser threat of duplication which specialized markets carry. Concentric diversification is the relation of a new product to an existing one. Another example of this is the creation of the hybrid car. When gas prices and the well-being of the environment become a growing concern, diversification of the auto industry to provide fuel efficient, “green” cars pays off. Conglomerate diversification carries the most risk because it creates a need for a company to diversify outside of its means of production. As discussed in the “reference for business” article, Phillip Morris’ act of joining with Miller Brewing company to gain a broad spectrum of consumers was challenging because neither had experience in the production of their products. In the long run, if this type of business venture is successful, the payoff exceeds the risk.
http://www.gulfnews.com/business/Commerce/10185500.html

http://www.referenceforbusiness.com/management/De-Ele/Diversification-Strategy.html