Expanding Product Offering
Benefits
Having multiple product lines can diversify risk, add to a company brand and potentially grow business. Every business has its core competences. These core competences are what each business utlizes to generate success (economic, environmental or social). Adding to these core competences or core products grows awareness of a company (or brand) while diversifying a business dependence on its existing competences or products. Through the addition of new products the business will grow revenues.
There are more benefits as well....
Competition
In most industries, competitors offer similar products or services to customers. The competition is healthy and helps control cost and maximize investment for customers. However, providing a business with a distinct competitive advantage has proven successful in the past. By offering turnkey solutions a competitor develops a unique advantage over others. The addition of a new product could help a business not only compete with existing competitors but allow the business to compete more broadly in the industry as well.
New Business
By expanding the product offering a business can attract new customers with completely different preferences from their existing customer base. This potentially evens out seasonal sales model, increases cash flow and generates business on the existing product line through cross-over products.
Evolution and Sales Cycle
As solid reliable products tend to offer a long life span, repeat buisiness is difficult to achieve. The sales cycle tends to be very lengthy and generate little to no revenue during the life span of the product. At the same time, as new competing products are introduced, older models with fewer features become less desirable. This is the evolution of products and tends to add to the sales cycle. A new product offer can even out the 'highs' and 'lows' of this cycle.
