Understanding Business Verticals: How to Choose the Right One with Examples

Are you planning to expand your business to new business verticals? If yes, it will take your business to the next level only if you choose the correct business verticals. But how to choose the right business verticals? Selecting the correct business verticals is a crucial thing. For this, you need to consider some factors.

Before that, you need to know what business verticals are.

What Is A Business Vertical?

Business vertical, also known as vertical market, is a specific segment of a broader market where suppliers serve a specific audience rather than focusing on industry. This helps businesses increase revenue by focusing on their particular target market.

For example, healthcare is an industry, and healthcare equipment is a business vertical.

So it is necessary to identify your business's correct business verticals and design unique solutions to fulfill them.

In terms of serving the range of customers, it can be classified into horizontal and vertical markets.

What are Horizontal vs. Vertical Markets?

The horizontal market serves a range of customers across different industries. This means companies or products in horizontal markets in general audience; for example, pens and Uber are used by a range of people.

Vertical markets serve a specific industry, a group of customers with specialized needs. For example, CRM, accounting software, etc.

How to Choose the Correct Business Verticals?

Business goals

Find your short and long-term business goals, whether you have a startup or an established business. This also needs to be considered when you choose the correct business verticals.

Identify your strengths and interests

It is important to identify your strengths and interests in which segment you have expertise and competitive advantage; this will help to filter the areas of your business that don't have expertise.

Gather buyer insights

Before choosing a business vertical, you need to gather all buyer insights as you can to find the right business verticals in demand.

Research market competition

Identify the competitor for your business by researching. This will help to find unique points of sale (POS) and opportunities to stand out.

Industry trends

Keep an eye on current changes, developments in technologies, and consumer behavior to choose the correct verticals that help to offer longevity and relevance.

Consider Profitability and Scalability

Make sure the business vertical you choose is profitable and scalable for your business. Some verticals may have strong customer demand but low-profit margins, while others might have high margins but limited scalability. So when you choose a business vertical that has high profitability and scalability, carefully.

Develop a complete business plan

Create a unique business plan that meets with strategies, target audience, market trends, and pricing.

By considering these factors in your decision-making process, you can easily select a vertical that is well-suited to your goals, strengths, and market opportunities.

Advantages of Choosing Business Verticals

Reduced competition

Vertical markets have less competition than horizontal markets because horizontal markets cater to a wide range of industries and people. Hence, horizontal markets will have much more competition than vertical.

Better campaign outreach

In a vertical market, the target audience is small; hence, you can target that specific audience directly.

Reduce risks

Depending on a single market or industry can expose a business to significant risk. Businesses can spread their risk and protect against market shocks and swings by ranging into other verticals.

Marketing Insights

Companies can acquire important marketing knowledge and insights.

Building relationships

This strengthens your brand and can lead to collaborative opportunities, increasing both profitability and market presence

Long-term growth

Investing in new business verticals can fuel long-term growth and sustainability. By staying up to date with technologies and developments, your business will stay ahead of the changing market needs.

Marketing Verticals Examples

• Pet-related stores
• Makeup and beauty brands
• The bank specializes in home loans
• Online institutions that offer courses
• A restaurant that serves food for people who eat vegan food

Another example, by focusing on a niche within the automotive industry, you not only gain expertise in a specialized area but also create a business that is set up for growth within an emerging market.

Wrapping Up

It is essential to choose the right business verticals for your company's growth and success. By conducting thorough market research, evaluating competition, and assessing industry trends, you can identify profitable business verticals and opportunities. Wabcom is expanding its business to new business verticals, including HRMS, CRM, and more.

FAQ

Q: Why should businesses consider exploring new business verticals?

Exploring new business verticals can help businesses diversify their revenue streams, reach new customers, and stay competitive in a rapidly changing market. It also allows companies to capitalize on emerging trends and expand their market share.

Q:What are the examples of B2B vertical markets?

Beelove, it is an e-commerce store that makes and sells products made from honey and related byproducts.

Q: What are the benefits of expanding into multiple business verticals?

Expanding into different business areas helps companies reduce risk by having multiple sources of income. It also allows companies to use their existing infrastructure and resources in new ways, potentially leading to cost savings and increased efficiency.

Q:What are the examples of B2C vertical markets?

Vertical markets in financial services include businesses that provide specialized financial services like banking, insurance, and more.