This paper is based on findings from collaboration between a medium sized manufacturing company, traditionally manufacturing components to system integrators, and an inventor company. The companies are striving to develop, manufacture, and market a new product on a new market. Our research question is to identify barriers to product and market diversification. The study has been performed as a number of interviews and work-shops, where barriers and possibilities have been identified. In this paper we suggest an expeditionary approach to managing diversification as an alternative to traditional approaches, technology push and market pull. The expeditionary approach stresses that, in the context of SME:s, a network of companies needs to collaborate intensively with each other as well as with customers from the very early initiation of business idea, identifying the customer needs and functional requirements of the product, while simultaneously working on product specifications, manufacturing process design and marketing in a collaborative network of partners.