The business world or market is clearly heavily populated. Although new problems arise everyday, businesses that offer solutions to these problems come up just as fast too. There are business sectors that produce great returns and as a result of this, they tend to be well populated.
So an individual who is passionate about business in a field might get overwhelmed by the weight of completion in such field.
This is where specialization comes in.
What is Specialization?
Specialization in business is a strategy whereby a company or business entity focuses it's resources on the production of a specific class of product or service in order to maximize productivity.
Specialization and Business
Specialization was actually not as popular in the old business world compared to decentralization. Decentralization is the opposite of specialization, where businesses extend their services to cover other related fields in their niche.
In recent decades though, there has been a shift in the business world with companies moving to specialization as a strategy. This shift could be attributed to presence of heavy population in almost every business niche.
Let's take the field of medicine for illustration purposes. In the past, there were quite a few medical professionals, infact, there was one for each hospital or community. So a medical doctor had to be proficient with everything from child birth to eye defects or skin diseases. In recent years, with specialization, we now now have Neurosurgeons, Opticians, Gynecologists, Dentists and so many others.
The Doctors in these fields are professionals in their area of expertise and are far more efficient to handle issues in their fields. This is why Neurosurgeons earn more than medical doctors.
Now, just as it is in the field of medicine, so it is with business.
Your company can identify a gap of need in a heavily populated market and specialize it's resources to provide products and services to meet such need.
How to Identify a Niche to Specialize In
How do you know a market niche is good enough for specialization?
In no particular order, you'd need to:
1. Identify your area of expertise
If you want to Specialize in your products and services, you'd need to identify what area you have a good deal of knowledge, expertise and experience on. Just like with the neurosurgeon, who needs to study the human brain for years in medical school with adequate experience before getting certified.
2. Be passionate about your pursuit
For any business idea to be successful in general, it must be driven by dogged passion. Remember that there are also other decentralized businesses offering the same services too.
But, what would set your business apart is the level of passion you invest into building your business, services and products. Which would consequently increase the efficiency with which you provide services and products for customers. Your passion would be a light that would reflect on all aspects of your business. In your interaction with clients, your marketing efforts, execution of services, including the morale and productivity of your staff.
3. The size of the market
Before specializing in any business niche, ensure that the market size is big enough to produce good Return on Investment for your business.
For instance, you are passionate about sports and children and decide to merge your interest in a children's sports wear store. In a country like Nigeria, the market size for such a business is pretty small and the business might not do well.
Specialization can be all the difference a business idea needs to blossom if done right. If not, it would be a kiss of death as the ROI would be really poor. Hence, before you'd consider specialization, ensure that you
Have in-depth knowledge, expertise and experience in your niche of choice,
Have passion and enthusiasm for the business
And ascertain that the market size is big enough to support your business.
Thanks for reading and Godspeed :)
Extrigs! In Your Inbox
Don't miss out! Get the best of our blog posts directly in your mailbox.
Is your Business' Social Media platform suffering? Maybe there's something you're doing wrong. Do you want to market your business on social media platforms? Are you looking for a skill that can fetch you money from the comfort of your home? Come and learn about Social Media Marketing.
Do you plan to start up a business soon or later? Have you just started a business? You need to read this piece. It explains bootstrapping in simple terms, explores in details, it's advantages and disadvantages for business start ups with examples.
Ways you can raise capital to finance your great ideas include partnership, fundraising, loans, friends and family support. When finance becomes a big deal, there are some little businesses you can start with less capital.