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Mar 18 2008

Geographic Diversification – Good Strategy for Business

As if the current economic climate needed to remind us, this old financial planning lesson is timeless.

For personal wealth: If you want to retire, diversify your investment portfolio.

For business wealth: If you want to sustain growth, diversify your product portfolio – according to customer segmentation and geographic distribution.

Last week, General Electric proved this theory still holds weight among senior corporate management. GE is globalizing all of its businesses. Emerging markets are growing fast and have a “tremendous need for capital” to fund infrastructure spending on power and water investments which is a core competency for GE.

For the first time, overseas sales accounted for more than half of GE’s total revenue of $172.74 billion in 2007. General Electric Chairman Jeffrey Immelt said in January that increasing global spending on infrastructure projects was offsetting weakness in U.S. consumer sentiment.

So if global diversification isn’t a part of your own association strategy, are you risking something by keeping all your eggs in one basket?

About the author

Peter Turner

As MCI's Senior Advisor, Global Development Strategy, I help associations build and execute global growth strategies. Over the past 30 years I have served three associations (ASAE, MPI and IEEE Computer Society) as a leader of business, product and partnership development.

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