What is Dilution?
Dilution is a very consistent yet dynamic term. It has different applications in various fields while maintaining what appears to be a uniform inference all through. Most of its application is in areas which have to do with loss of concentration or strength in one way or another. Dilution is a term that is used in chemistry, investment and finances, production processes, trademarks and even biology. In all these different areas, the word has some relationship or a meaning that tends towards reduced power or concentration.
Dilution as applied in chemistry has to do with reducing the concentration of a chemical through the introduction of other substances. A chemical has a concentration of 100% when in its pure state. Introduction of other substances reduces the concentration of the chemical and thus dilution occurs. Dilution can be done with substances of any state and can sometimes occur with substances of different states. The common application of dilution in chemistry is where a solvent such as water is added to a solution. This reduces the strength of the solute that was contained in the solution. Though this may appear to be a chemistry lab process, it is frequently applied in everyday life. An example of chemical dilution that almost all of us have done is when adding water to concentrated fruit juice. This differs from dilution done in the lab as it does not involve exact quantities but rather relies on the taste preference of the individual.
Another scientific application of dilution is in relation to the dilution gene. These are genes that are associated with color loss on the coats of living things. The reduced concentration of the pigment producing cells leads to what may appear to be an absence of color. Sometime the loss of color could also be as a result of certain types of pigment producing cells. Pigment dilutionis known as hypomelanism though most people refer to it as albinism. There have been extensive dilution gene studies conducted on cats and horses as scientists seek answers on the coats of these animals.
In business, dilution is applied in the area of trademarks as well as shareholding. Trademark dilution is a violation under law that involves the weakening of a famous and strong trademark through the introduction of a similar one. The law concerning trademark dilution is not restricted to related or competing products. It is meant to protect strong trademarks from tarnishment and blurring. As regards shareholding, dilution applies where there is a reduction in the value of a company’s shares through the issuance of additional shares. The process requires approval of share holders and regulatory bodies before it can be implemented. This is option is often used by companies that are looking to raise additional capital especially for business expansion. This means that though the company may appear to gain more than the shareholders at the time of dilution, there are significant gains to be enjoyed in future especially for shareholders who opt to buy the additional shares being issued.