Horizontal Diversification versus Product Development. What's the Difference?

      
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		            		Sanjit Keskar
Professor, India
			            
Horizontal Diversification versus Product Development. What's the Difference?

	          		From the summary article on this site about the Ansoff Matrix.

Product Development. Sell new products or services in current markets. These can be accessories, add-ons, or completely new products...

Horizontal diversification. This occurs when the company acquires or develops new products that could appeal to its current customer groups even though those new products may be technologically unrelated to the existing product lines.

Both seem to be saying the same thing as far as completely new products and existing market (current customer groups).

So where is the difference? And isn't diversification also about new markets - so where is the new markets in horizontal diversification?
				      
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						            	Jaap de Jonge
Editor, Netherlands
												
				                Product Development versus Horizontal Diversification

													Good question.

First of all, BOTH of these strategies are dealing with a situation of a business firm attempting to market NEW PRODUCTS (or services).
As the summary states correctly, in the case of a product development strategy a la Ansoff, we are aiming to sell NEW PRODUCTS IN THE CURRENT MARKET.
In the case of diversification we are aiming to sell NEW PRODUCTS IN A NEW MARKET.
In case of horizontal diversification the clients are the same. Because horizontal diversification involves providing NEW PRODUCTS IN A NEW MARKET TO EXISTING CONSUMERS. For example, a cosmetics firm aims to enter the jewelry market by marketing these jewelries to its loyal cosmetics customer base.

Remember to pay attention to the subtle difference between "clients" and "markets". Hope this helps..
				                
										              -1

						            	Isaiah Maisiba
Manager, Kenya
												
				                Product Development versus Horizontal Diversification
The points of distinction lie upon: level of risk envisaged, resources available (synergies), and co... Sign up
				              
										              0

						            	Paramathmuni srinivas Kumar
India
												
				                In Blue Ocean Strategy is it Diversification or Product Development
If we were to create and capture the uncontested market then I don't think the definition fits into ... Sign up
				              
										              2

						            	Isaiah Maisiba
Manager, Kenya
												
				                Product Development versus Diversification and Blue Ocean Strategy
Blue Ocean Strategy (BOS) falls, in my view, within the'Diversification strategy ' in the Ansoff mat... Sign up
				              
										              4

						            	Jaap de Jonge
Editor, Netherlands
												
				                Blue Ocean Strategy Could be Diversification, But...
@Isaiah Maisiba: Some thoughts… According to our short but accurate Summary of Blue Ocean Strategy, ... Sign up
				              
										              0

						            	Sanjit Keskar
Professor, India
												
				                Existing Customers in a NEW Market
@Jaap de Jonge: I catch the strain of logic but by and large it escapes me how there could be existi... Sign up
				              
										              1

						            	Jaap de Jonge
Editor, Netherlands
												
				                Existing Customers in a NEW Market
@SanJIT Keskar: I think I already wrote about providing NEW PRODUCTS IN A NEW MARKET TO EXISTING CON... Sign up
				              
										              0

						            	Sanjit Keskar
Professor, India
												
				                Horizontal versus Concentric Diversification
@Jaap de Jonge: OK I get it now...I was equating customer base with existing market. The example mad... Sign up
				              
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