Line extensions-when firms add a new product or service to existing offerings-can be very tricky. Unless there is a logical connection between the original products and services and the new one, the new offering is likely to fail.

Bausch & Lomb, for example, known for precision eyeglass lenses, are now offering vitamins for eyesight restoration. Chances of success? Pretty slim. Bausch is known for lenses, not pharmaceuticals.

But, Gateway Computer's recent promotion of digital cameras and accessories makes perfect sense. Because Gateway makes computers, and digital photography is a growing part of today's computer experience. Computer users are increasingly replacing their film cameras with digital cameras....and upgrading their computers to deliver the necessary processing power.