Vertical vs Horizontal Development
When it comes time to develop a business plan or project, making a decision between vertical or horizontal development can be difficult. This decision should be based on the type of project and the goals of the organization. Vertical development is a method that focuses on developing new products and services that build upon the firm’s existing products and services. Horizontal development is the process of developing parallel products and services to the firm’s existing products and services. This article will discuss the differences between vertical and horizontal development and provide a few examples of when each method of development might be used.
Vertical development is a growth strategy used by many businesses that involve investing in improving or extending existing products and services. The main aim of vertical development is to create materials and services that are a value addition to the existing portfolio of the firm. Vertical development is the process of taking a product to a new level of performance or developing a related product that complements the existing product. This strategy is most often used when there is high customer demand for a more advanced version of a product or service. Companies that employ vertical development will typically spend a lot of time and resources on research and development to determine what features customers may be interested in seeing. This strategy can easily lead to faster growth and greater profits.
Horizontal development involves creating products or services that are similar in nature but serve different purposes than those already existing in a firm’s portfolio. This strategy is often used when a company has a strong existing market for its products and services and the firm wants to capitalize on this. Horizontal development can help firms increase their market share as well as provide new sources of revenue. This strategy is not without its risks and complexities. There is the potential for conflict between new and existing products and services, and there can also be challenges associated with determining the target audience for the new products and services.
In conclusion, vertical and horizontal development are two different strategies for expanding a business. Vertical development involves expanding current products and services while horizontal development involves creating similar products and services that serve different purposes. There are pros and cons to both strategies, and the decision of which strategy to pursue should be based on the goals of the organization and the type of project being developed. Making the right choice can be the difference between success and failure.
