The model for business growth seems straightforward: You get a promising idea, research its potential, invest in the right marketing, then sit back and watch your product or service sell.

But if there's one thing we're all learning, it's that there's no sure route to success. A television- and newspaper-based advertising structure can crumble. SUVs that sold spectacularly well for a decade can suddenly sit, ignored, on dealer lots. Businesses that don't adapt to changes in consumer taste or new scientific breakthroughs get left on the sidelines, watching their profits shrivel.

That's the lesson behind this week's big merger news. Pharmaceutical giant Merck ( MRK) made an offer to buy rival Schering-Plough ( SGP) for $41 billion, the kind of mega-deal that's gotten all-too-rare these days. For both companies, it's a chance to strengthen their core competencies, while diversifying into a wider range of products.

While your company may never write a billion-dollar check to buy out a competitor, the same forces behind the merger may affect the future of your business. If you've built your reputation on one or two big products or services, now is the time to widen your offerings. Diversification is everything.

"We're seeing a lot of merger activity in the pharmaceutical industry," says Linda Bannister, senior area analyst for health care at Edward Jones. A few weeks ago, Pfizer ( PFE) made a $68 billion offer for Wyeth ( WYE), and Swiss pharmaceutical company Roche yesterday announced that it agreed to buy the rest of biotechnology pioneer Genentech ( DNA) it didn't already own. "Many of these companies are cash-rich and growth poor."

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