Thursday, June 18, 2009

Diversification: Riches In Niches

Every company is looking for ways to diversify and gain some new revenue streams, especially in this economy.

One warning: Take your time and find the right solution. Remember: there are riches in niches. Don't leave your niche behind trying to find the holy grail of income.

Years ago Hardee's decided to diversify and serve fried chicken. The chicken was excellent and soon the stores were packed with patrons buying chicken. The only problem: Hardee's didn't have the capacity to serve large amounts of chicken. Soon, patrons were waiting 30 minutes for chicken. That didn't last long, as you can imagine.

It didn't take long before customers, angry they had to wait 30 minutes for chicken, stopped coming not only for chicken but for the restaurant's niche: burgers.

Wisely, Hardee's abandoned the chicken concept and once again focused on its niche: burgers. The chain learned a valuable lesson about diversification. Today, even as chains strive for healthier menu choices, Hardee's continues to focus on its niche: burgers.

--Ron Ameln, SBM


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