Participation by hospital pharmacy departments in planning and development of diversified services is described. Diversification requires market planning. Seven basic marketing steps are identification of mission, goals, and objectives; identification of growth strategies (market penetration, market development, product development, and diversification); market analysis of external factors (size, growth, and logistics; reimbursement and financial considerations; competition; regulatory issues; and legal issues); market analysis of internal factors (departmental organization and reporting lines, demographics of the institution, and costs and productivity associated with the new service); program development and design; implementation; and evaluation. Hospitals can diversify by expanding acute-care services through management contracts and mergers; developing new services to include long-term-care, ambulatory-care, occupational-health, and wellness programs; starting other health-care ventures, such as consulting, continuing medical education, and continuing education for nurses; and expanding into non-health-care businesses. Vertical diversification is finding new markets for existing services; horizontal diversification is development of new services for new markets. To diversify, an institution may need to change its corporate structure; it may form a family of corporations that includes a university, nonprofit hospitals, holding companies, for-profit corporations, joint ventures, and service organizations. Through diversification, institutions and pharmacy departments can create alternative sources of funding and offer more comprehensive services to patients.