Diversification

My brother left the country and moved here last week presumably looking for greener meadow. He’s here taking over the running of a small company owned by this one sheikh. Bro of mine is one heck of a character - the most apparent is his boldness to take risks that are sometime completely avoidable and his bluntness of bludgeoning any damn thing crossing his path. He relented 9-5 job years ago after giving a good punch on his boss face before started his own business.

He was doing fairly ok for the first few years, but suffers badly in recent years, with less and less business secured. I have been observing his progress over the years and feel sorry for him. Though on the surface he seems pretty much independent as compared to me who sometime has to cream boss asses, life is actually shit-tough for his wife and kids… I hope it’ll start changing soon.

The other day I was talking-cock with a colleague about businesses and what actually makes one really succeed. So we, the smart-asses, kinda concluded that one of the thousand principles for success is one ability to fully master the trade he is in, I mean really master it to the extend that if you are into condom manufacturing business, you should not only be acquainted with the very aspect of that rubber such as the elasticity, the grip, the rim, the sensitivity and flavor, the ‘watch-that-pubic-hair-when-rolling-down’ dilemma, but also the market and other external factors that could affect the market. This mastery could only be attained by years and years of doing only that and being only there – yes, we call it specialization!.

In a real business world, specialization provides you with the aptitude to be familiar with the surrounding variables influencing every corner of your business - the complete supply chain that includes market, suppliers, sub suppliers, customers et all. Only with this knowledge gained from specializing that we could sail through various predicaments, adeptly identify the opportunities and the threat, and hence knowing the precise time to strike or to retreat for the business to leap a step forward.

On the other hand, diversification, though it normally associated with an act of business expansion, is actually a risk that could either make or break you. Every business entity envisages to diversify as part of its development – so as to be one big momma conglomerate with seemingly growing turnover and income, but untimely, premature or misdirection to this vision may twirl it the other way around.

Check out big corporations back home who went eagerly on diversifying in unfamiliar playing field only to be backfired a little later with more mismanagement and losses.