COVID was the most unprecedented situation across the globe. Whole world was caught unprepared for this. Infact, a pandemic of this scale – in the era of scientific revolution – was quite unexpected. Most part of world was under lockdown. Many businesses fell flat. Many lost jobs. Many businesses facing survival issues.
A smart lot of people change their course and gone into different businesses. These businesses surged due to the situation. This diversification was due to two major reasons.
- By planning and analysis : Bigger business units analyzed the situation and quickly planned for this. They made a product line, got it tested and brought them to market circulation in shortest possible time.
- Due to distress: Smaller units for individuals diversified due to sudden distress in their existing work. They did so to survive the situation.
Diversification in such a small time is worth mentioning. Generally, this process used to be preceded with planning, lot of R&D s, trials and errors etc. But the pandemic skipped all those steps. New product and new business module came up in no time. This time taught all of us one simple thing – not to depend on one product line. In other words, not to keep all apples in one basket.
During economic downtime, consumer’s demand for “nice to have” products, take a downward leap. Consumers focus on basic needs only. The products that fit into lower parts of “Maslow’s hierarchy of needs” becomes essential in this phase.
Diversification mainly are of three types:
- Demographic diversification : This type of diversification happens when an entrepreneur shift to serve a different social group, gender, locations, etc
- Product diversification : This type of diversification takes place when an entrepreneur gets into a different product line. For examples: Gin distilleries of United Kingdom started producing alcohol-based hand sanitizers. Barbour – famous for its wax jackets – started making scrubs for front line staff. Dyson is started manufacturing ventilators S
- Sector diversification: In this type of diversification and entrepreneur shifts to a different and wholly new sector, which is no way related to existing line of business.
Almost all above types of diversification, could be seen even at the local levels. Some of them to quote are
- A mason – as construction sector dipped – diversified to vegetable selling business.
- A person who used to pull rickshaw – due to lack of passengers – started the business of selling fish.
- A person who used to do electrical work – due to lack of demand – diversified to fruit selling business.
All these are the examples of distress diversification. All these happened in shortest possible turnaround time. “Quick To Act Mechanism” of these people is worth mentioning. I must say street-side offers more management lessons than Top B schools of the world.
From street-side to heavy brands, there are many diversification all around. Let me quote a few.
- Wow Momo – a momo selling brand – diversified Wow Momo Essentials, to cater for essential services during lockdown.
- Ferns & Petals – A flower brand – diversified to an unique celebrity video product, wherein one can get personalized message from a favourite celebrity on an occasion.
- Vistaprint – aprinting firm – now facilitates ordering of personalized and branded face masks.
- Airbnb website offers a host of other services like winemaking, fitness lessons, Salsa etc
- FMCG majors like Marico – makers of Medicare, Dabur, Emami – makers of Boroplus – diversified to sanitizer market. Marico even came up with vegetable sanitizers
- Dabur diversified to an immunity boosting product – Tulsi drop.
- Cavin Kare – producers of chik shampoo – entered into sanitizer market
- Myntra – introduced gaming content to attract more traffic to its app.
- Nykaa launched DIY video and work from home videos
COVID outbreak lead to drastic changes in consumer behaviour. This change of behaviour lead to change in demand. This change in demand gives opportunity for diversification. One’s open mindedness and flexibility in work style can help to reap the opportunity to the fullest