How do you grow your business? After reading this article from the LA Times, I'm tempted to say it's once you've satisfied one segment of the market. Newegg.com, the feature company in the article, did it by satisfying the most savvy and hardcore segment of the computer peripherals market, the gamer. This is one way of "doing one thing and doing it well."
If you satisfy one customer or segment time and again, you can learn from it. You can tinker with product or service delivery, customer service and pricing with little risk of alienating a larger market. Once you have that down cold, you can always expand.