Bet on several different horses or stick with one?

In an attempt to increase profitability, many companies are choosing new ways. The big question is, is it always a successful recipe?
Throughout history, there have been many examples of companies that first focused on a specific product, but then expanded their business to include other areas. One of the clearest examples of this is Japan's Nintendo, which first sold playing cards of various kinds before the company became perhaps the world's most famous video game manufacturer of all time. Finland's Nokia was in the business of making both wood and rubber before it became a penny-pinching cell phone.

A more modern example is Amazon, which started as an online bookstore in the mid-1990s but now sells everything from clothing and consumer electronics to various forms of online services. In Sweden we have Saab, which started out as an airplane manufacturer but then switched to making cars.

Perhaps most common is when a company decides to expand in a nearby area, such as the gaming company FreeSpins24. The company used to focus only on odds and betting, both online and in physical stores. For several years now, https://freespins24.net/ has also offered casino games as well as live betting and live casino, which has proven successful.

Investing in several different businesses is called diversification. This term comes from the stock market and means not to bet everything on one card, but to spread the risks and have several different stocks in your portfolio. This reduces the risk of big losses if a stock loses a lot in value. This model is becoming increasingly common in other markets as well. In many cases, diversification occurs because a company wants to expand on its own and test something new. In other cases, it may be absolutely necessary for survival. Netflix, which used to rent DVDs by mail order, was close to bankruptcy before it realized that online streaming was the music of the future.

But aren't there any companies that have succeeded without diversification?

Yes, and there are certainly just as many examples. A good example is the Swedish clothing manufacturer Hennes & Mauritz, which has focused entirely on clothing since 1947 and will continue to do so in the future. An international example is the French tire manufacturer Michelin, which, despite having 130 years of experience, continues to stick with what it does best, which is tires. As we learned from this resource, e-commerce is doing what gambling companies do: betting on mobile devices.

Entering a whole new market, of course, requires very little, not least in the form of financial resources, but perhaps most of all in a willingness to take risks. Something that is necessary in any form of expansion of a company's operations. It must be said, however, that diversification does not automatically lead to success, as an overly vague business idea easily loses focus. It's simply a matter of having a clear goal, while at the same time the financial risks shouldn't be too great. At the same time, it is important to take a chance when it comes and when a new opportunity arises.