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Brand Extension for Reducing Risks - Essay Example
Companies that choose to stay in one place and make do with its signature products, proven moneymakers though they may be, will run into trouble if not go out of business sooner or later. Diversification and innovation are imperative for business growth and expansion, and this means coming up with new products to boost a company's product line…
This dilemma has long stared the food industry in the face, this sector being made up mostly of small and medium-sized companies each with 20 or so employees. (The likes of McDonald's, Kentucky Fried Chicken and Kenny Rogers are the few notable exceptions.) Even so, the food sector is perhaps the most profitable and widely distributed industry in the world with, it is said, one food establishment to be found in every street corner. Economists have come to think of this industry as uniquely recession-proof, catering as it does to the most primal urge of man - the appeasement of hunger. During an economic crisis, people may forego acquisition of cars, appliances and cut back on their expenses for clothes and the like but food establishments will always draw them in. As a gold mine rich in business opportunities, it is said that all the food companies have accomplished at present is scratch the surface of this bottomless industry.
Because of the food companies' size, the food sector has been described as a low-tech industry, with the lowest research-and-development to sales ratio. ...