Producing more than you need of some things, and less of others, hence "specializing" in the first. In international trade, this is just the opposite of self-sufficiency. Doing less than everything, as when a country produces fewer different goods than it consumes. In a 2x2 trade model, this means each country produces just one good. With many goods and countries, it means each country has some goods that it does not (and cannot competitively) produce. Also may be called complete specialization.
When a business focuses on producing a limited number of goods and leaves the production of other goods to other businesses. Specialization also describes how each person working to produce a good might work on one part of the production instead of producing the whole good (e.g., in a shoe factory one person cuts the leather, another person sews it, another glues it to the sole).
A specialization produces a more specific description of a model element by adding children. A child element is the specialization of a parent element.