horizontal diversification strategy

for decades, apple was a brand strongly rooted in the computer and software segments of the tech industry. keen to modernise their traditionally hand-drawn animation, the company – rather than start from scratch – acquired a smaller competitor with the requisite levels of experience and expertise already in place.

over the years, however, the company has made a spate of acquisitions in the automotive business, acquiring other car brands and marques to cater to a wide range of customers. estée lauder also diversified into the haircare segment when it acquired aveda in 1997, strengthening this purchase with the integration of bumble & bumble – a salon and hair products brand – into the company’s portfolio in 2006. with over 25 different brands in skincare, cosmetics, makeup, and haircare, estée lauder has shown that diversification into related markets – whether through acquisition or in-house production – is the key to growth. thanks to their horizontal diversification strategies, both pepsi and coca-cola now own nearly all the successful beverage brands in the world, driving value and revenue far beyond their own original products.

whereas, the first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line, the diversification usually requires a company to acquire new skills and knowledge in product development as well as new insights into market behavior simultaneously. these are either brand extensions or product extensions to increase the volume of sales and the number of customers. it also seems to increase its market share to launch a new product that helps the particular company to earn profit.

the company could seek new products that have technological or marketing synergies with existing product lines appealing to a new group of customers. moreover, the new products are marketed to the same economic environment as the existing products, which may lead to rigidity or instability. the first one relates to the nature of the strategic objective: diversification may be defensive or offensive. going into an unknown market with an unfamiliar product offering means a lack of experience in the new skills and techniques required.

thanks to their horizontal diversification strategies, both pepsi and coca-cola now own nearly all the horizontal diversification[edit]. the company adds new products or services that horizontal diversification involves the extension of a production of products or service above and, . horizontal diversification involves providing new and unrelated products or services to existing consumers. for example, a notebook manufacturer that enters the pen market is pursuing a horizontal diversification strategy. horizontal diversification can be seen in the following two forms \u2013 concentric diversification and conglomerate diversification.

horizontal diversification is typically the diversification strategy with the least amount of risk involved, vertical diversification is also known as vertical integration. in this growth strategy , a company expands its business in the horizontal diversification allow a firm to start exploring other zones in terms of product manufacturing. companies depend,

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