Is diversification the best approach to business growth? Why do some young Ghanaian companies think of diversification so quick in their growth process? Which is more risky.
Most businessmen diversify and the question that comes to mind is, Is it because they think they can do more or simply because there are alot of unexplored areas that need attention. Some of the companies that have diversified so much are; RLG, or let me say AGAMS holdings, Zoomlion or let me say Jospong Group of Companies… the UT family..or let me say UT holdings.. and then….. Groupe Nduom with their 65 companies or subsidiaries (from Radio stations to football teams. I understand they do and own everything )…, Despite Group of Companies and the various companies…….. Kenpong and the various companies….. and the list continues. Even very small startups are beginning to think about doing a bit of everything. Diversification in my opinion is good for risk mitigation (“Don’t put all your eggs in one basket”) but it is in itself very risky and costly for business growth since you will be offering a totally new product or service to a totally new and unknown market. Won’t it be better to be known for one thing or for Ghanaian businesses to Master one market before diversifying like Apple, Google and Berkshire Hathaway. I believe Kasapreko company limited is doing well in the market of beverages and I am yet to find out how diversified they are too. I won’t be surprised though if they are.