Business discussion whats better?

[Joelcool7]

Alright so recently I have noticed that there are ups and downs to two major strategies I see tech businesses and other businesses doing. One strategy is to focus on one industry and product while the other is to expand business into multiple industries and release many products. I'm wondering which of the two different paths users of VGChartz think is the best. (Disclaimer I know these aren't the only two paths a company can take, I'm just asking which of these two is better)

I'd call the first group specialists. I can think of very few companies that fit this category the biggest one that we all know of is Nintendo. Another example to a lesser extent would be RIM. Nintendo in the last 40 or so years has been dedicated to video games they have released video game console after video game console. Video game after video game never really branching out of the game industry. RIM also a specialist has pretty much recently just released devices based on its BlackBerry OS, so that means cell phones and the recent BlackBerry tablet. Both of these companies specialize in their specific field. But recently Nintendo and BlackBerry have both come upon disappointing profit margins with only game consoles and cell phones to support them. When sales of those devices go down the whole company suffers.

 

The second group I'd call Ex-panders. They don't stick to one industry or market they go in new directions constantly if their is money to be made in another industry or device they are quick to pounce on it. The biggest three examples of this I can think of are Sony, Apple and to a lesser extent Disney. If these three companies see a new industry or market for a new product they pounce. Unlike the specialists they expand constantly creating new products. A perfect example is Apple was always a computer company, then it became an MP3 company then it became a phone company and TV(Via Apple TV) company and then tablet company. Every time they see a chance to take advantage of a new market and industry they pounce. The upside with this is they aren't reliant on a single industry, if Sony's gaming division suffers they can supplement it with movie income. If Apple's computers suffer I-Phones more then make up for its loss. The downside these products all cost money to make and develop you need to spend considerable resources expanding for every new device and industry Sony goes into they spend a ton of money. So if say multiple industries failed at once such as film, music and game consoles all being hit simultaneously the company would be in big trouble.

So whats better, at first glance it would appear the specialists are at a disadvantage relying on one industry and line of products to support themselves. While the second set of companies spend so much on expanding and rely so heavily on multiple products, they spread themselves thin which could lead to an equally devastating problem.