2. Choice of industry and ideas for diversification

Ideally the choice of industry sector and/or business activity to diversify is preceded by a serious macroeconomic and sectorial analysis to identify economic fields with expected rapid growth and industries suitable for investment. However, very often, the general economic situation, existing expertise and experience of human resources or business, and the personal contacts of the company owner or manager, predetermine to some extent the field of the future diversification. Of course, the results of the preliminary company assessment should be taken into consideration.

But even if the above statement is true for your company, it is vital to include the next step which will give you an idea if this is truly the right direction to develop your business.

Invite a group of 5 to 7 experts from universities, marketing companies and other professionals in different fields and organize a brainstorming session. It is a good idea to hold the meeting outside of the company office, and to have the group work run by a company representative and an outside facilitator. The goal is to identify the greatest possible number of ideas for diversification. These experts will help your company experts to screen the ideas and estimate their technical and economic viability.

The resulting short list of ideas will be subject to the same procedure several times until you arrive at the one idea which matches to the greatest extent your preliminary criteria. This procedure may seem protracted and time consuming, but if it is avoided and a trial-and-error principle adopted, this can lead to a poor outcome.