Question

LEGO is product portfolio is quite larger. What are the advantages and disadvantages of product concentrations versus diversification?

Answer 1

Answer:

Concentration/Fixation implies concentrating on a less number of items and practicing on them to catch a specialty showcase portion. Broadening implies offering a generally substantial number of items to target diverse market fragments all the while.

Following are the advantages of fixation:

1. It enables a firm to accomplish fantastic quality and specialization in a little arrangement of items
2. It enables a firm to institutionalize its frameworks and procedures as there is less variety in the items
3. Fixation helps a firm focusing on a particular gathering with more spotlight on focused marking, promoting, and correspondence
4. It enables a firm to accomplish a religion status and brand dedication
5. It helps a firm charge an excellent cost

Following are the disadvantages of Concentration :

1. It builds chance as though the item bombs in the specialty advertise, it doesn't have some other market to make up for
2. The specialty market will have a restricted extent of development and it can immerse entirely quick
3. These disservices of concentration can be defeated through Diversification.

Diversification helps a firm spread the danger of disappointment among different items and market. Along these lines, when one item or market neglects to convey, the organization will have other market or items to adjust for. What's more, when the organization focuses on an expanded market, it has a higher potential client base. Lego embraced this arrangement of enhancement by offering a substantial assortment of items to an expanded group of onlookers. This system helped Lego skip back and catch the new market and also repositioning itself in its old market.

It began satisfying the requirements of an assortment of clients (like grown-ups, young ladies, Chinese guardians, and so on.) and catch a bigger piece of the overall industry. Along these lines, the broadening methodology gave Lego a considerable measure of focal points.