diversification strategy is one of the four main strategies for growth identified by igor ansoff in 1957, which enables companies to look at other markets they could tap into, or new products they could launch to increase their reach and revenue. for instance, diversification can also allow a company to minimize the risk of an industry downturn, it can boost brand image, and it can also be used as a defense mechanism to protect a company from strong competition. diversification can present itself in a variety of different forms depending on the direction a business wishes to move in, and can either be related or unrelated to the current business offering.
this is a different product altogether, but it has the potential to attract many of your existing customers. the parent company that owns all of the individual entities is known as a conglomerate, and it became one by successfully implementing a conglomerate diversification strategy. once an initial round of funding was secured, they began to develop their own seo software and market it as a subscription-based solution. in summary, a diversification strategy can be a goldmine in terms of reach and revenue, but it comes with an element of risk.
diversification is a concept that investors understand well. when companies open new channels of products, locations and new partnerships, they increase the chance of long-term success and increasing profits. it might seem hard to distinguish the difference between a bank and a financial services brokerage firm these days. the reason is banks have housed brokerage subsidiaries for a couple of decades now realizing that the ability to offer one-stop-shopping for all things money and investing is attractive to consumers. notable examples are jp morgan and chase bank or meryll lynch and the bank of america. when you already have a strong trust relationship with clients, it is easier to make an offer for other products or services. when consumers have multiple products with a financial institution, they are less likely to shop around and leave to a competitor. restaurants and coffee shops are always evolving. coffee shops never had more than a donut or bagel to grab with your cup of java.
this diversification model is subtle, because the company isn’t changing what it offers. the risk is in implementing resources to facilitate a new market that is untested. people in the line are a captive audience and rather than walk across the street to grab a sandwich after getting the coffee adds an element of convenience. this is called a concentric diversification model where they are similar products. consumers spend a lot of time and money trying to stay in shape, get healthy and recover from injuries. training facilities such as gyms and studios were even more specialized. more and more small and large businesses in these industries have diversified to expand the market. training at a facility that focuses on rehabilitation and healthy workouts may give the business an edge against its competitors. with more than 15 years of small business ownership including owning a state farm agency in southern california, kimberlee understands the needs of business owners first hand.
diversification strategy, as we already know, is a business growth strategy identified by a company many major banks have merged with major financial services firms. notable examples are jp morgan and chase bank or meryll lynch and the bank of america. even insurance companies such as state farm and allstate offer bank products and limited investment products. 3. conglomerate diversification. conglomerate diversification involves adding new products or services that are significantly unrelated and with no technological or commercial similarities. for example, if a computer company decides to produce notebooks, the company is pursuing a conglomerate diversification strategy., . diversification means branching out into new business opportunities, not just expanding your existing business. for example, if you have a dine-in restaurant in one town, opening a second restaurant in the next town is expansion, not diversification. adding corporate catering is an example of diversification.
diversification example. learning objectives. give some examples of corporate strategies ibm successfully diversified into services; disney does quite well with a portfolio ranging from films to good examples are the danaher business system, disney’s ability to create and cement, steel and textile companies are vertically diversified. in india, cement manufacturers have captive power,
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