diversification

In agriculture and business, the development of distinctly new products or markets. A company or firm may diversify in order to spread its risks or because its original area of operation is becoming less profitable. In the UK agricultural diversification has included offering accommodation and services to tourists - for example, bed and breakfast, camping and caravanning sites, and pony trekking. Another example would be chocolate bar manufacturers diversifying into ice cream versions of their brands to produce revenue in hot summers when traditionally their sales are slacker.

The risk associated with diversification is that the company will lose sight of its core business, lose focus, and suffer as a result of entering new markets it has no expertise in. Few companies have a brand strong enough to stand the degree of diversification a company like Virgin embraces.