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necromancer_678
- Senior | Next Rank: 100 Posts
- Posts: 49
- Joined: Wed Jun 10, 2009 12:07 pm
“Since no business can be all things at once, companies that specialize in one product or service are more efficient than those that offer a diverse product mix.”
From your perspective, how accurate is the above statement? Support your position with reasons and/or examples from your own experience, observations, or reading.
The statement that no business can be all things at once and thus companies that specialize in one product are more efficient than those that offer a diverse product mix is a controversial one. In today's challenging environment a company needs to stay ahead of its competitors and offer more than one product or services. I disagree with the given statement and the following are the reasons to support my point of view.
Firstly, companies that specialize in only one product or service are at great risk. For instance, a company X manufactures parts for a particular car. Now, suppose the car manufacture Y decides to phase out this particular car and launch a new model which does not needs the parts manufactured by company X. Thus, the decision of company Y results in loss of business for company X and as a result loss in revenues.
Secondly, a company can maintain its profit by diversification of its business. For example, Apple was successful in the computers business, but still it ventured in to other fields. Iphone has been such a success all over the world. Thus, if the computer business starts to fall, the profits from the sale of Iphone can keep the profits up for the company. Through diversification a company has various ways to invest the profits earned from one service to increase the profitibility of another service provided by the same company.
In sum, a company should offer a diverse product mix and not just specialize in one product or service as the risks involved are less and also, the company can remain in profit even if one of its products is not doing well.
From your perspective, how accurate is the above statement? Support your position with reasons and/or examples from your own experience, observations, or reading.
The statement that no business can be all things at once and thus companies that specialize in one product are more efficient than those that offer a diverse product mix is a controversial one. In today's challenging environment a company needs to stay ahead of its competitors and offer more than one product or services. I disagree with the given statement and the following are the reasons to support my point of view.
Firstly, companies that specialize in only one product or service are at great risk. For instance, a company X manufactures parts for a particular car. Now, suppose the car manufacture Y decides to phase out this particular car and launch a new model which does not needs the parts manufactured by company X. Thus, the decision of company Y results in loss of business for company X and as a result loss in revenues.
Secondly, a company can maintain its profit by diversification of its business. For example, Apple was successful in the computers business, but still it ventured in to other fields. Iphone has been such a success all over the world. Thus, if the computer business starts to fall, the profits from the sale of Iphone can keep the profits up for the company. Through diversification a company has various ways to invest the profits earned from one service to increase the profitibility of another service provided by the same company.
In sum, a company should offer a diverse product mix and not just specialize in one product or service as the risks involved are less and also, the company can remain in profit even if one of its products is not doing well.
