related diversification strategy examples

many firms accomplish this through a merger or an acquisition, while others expand into new industries without the involvement of another firm. related diversification occurs when a firm moves into a new industry that has important similarities with the firm’s existing industry or industries. some firms that engage in related diversification aim to develop and exploit a core competency to become more successful. through competing in this business, honda developed a unique ability to build small and reliable engines. sometimes the benefits of related diversification that executives hope to enjoy are never achieved. thus, on the surface, the acquisition of 7up by philip morris seemed to offer the potential for philip morris to take its existing marketing skills and apply them within a new industry.

it’s hard to imagine the logic behind such a move, but coca-cola did just this when it purchased columbia pictures in 1982 for $750 million. this is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries. according to ceo geoffrey booth, the zippo is viewed by consumers as a “rugged, durable, made in america, iconic” brand. zippo executives expect to sell about 12 million lighters this year, which is a 50 percent decline from zippo’s sales levels in the 1990s. harley-davidson, for example, once tried to sell harley-branded bottled water. although harley-davidson and starbucks both enjoy iconic brands, these strategic resources simply did not transfer effectively to the bottled water and furniture businesses.

a core competency is a skill set that is difficult for competitors to imitate, can be leveraged in different businesses, and contributes to the benefits enjoyed by customers within each business (prahalad & hamel, 1990). sometimes the benefits of related diversification that executives hope to enjoy are never achieved. according to ceo geoffrey booth, the zippo is viewed by consumers as a “rugged, durable, made in america, iconic” brand (ap news, 2011). zippo executives expect to sell about 12 million lighters this year, which is a 50 percent decline from zippo’s sales levels in the 1990s.

while buying companies outside a parent company’s core competencies can increase the size of the company and in turn its executives’ bank accounts, managing firms unfamiliar to management is generally a risky and losing proposition. decades of research on strategic management suggest that when firms diversify, it is best to “stick to the knitting.” that is, stay with businesses executives are familiar with and avoid moving into ventures where little expertise exists. if i believe in something, i sell it and i sell it hard.” and it the company bears her name has used related diversification and other growth strategy to create over two dozen brands of cosmetics, perfume. a skill set that is difficult for competitors to imitate, can be leveraged in different businesses, and contributes to the benefits enjoyed by customers within each business.

related diversification occurs when a firm moves into a new industry that has important similarities with the firm’s existing industry or industries. because films and television are both aspects of entertainment, disney’s purchase of abc is an example of related diversification. honda motor company provides a good example of leveraging a core competency through related diversification. this typically means the company decides to start taking over some or all of the functions related to the, unrelated diversification strategy examples, unrelated diversification strategy examples, types of diversification strategy with examples, related and unrelated diversification examples, best example of unrelated diversification. because films and television are both aspects of entertainment, disney\’s purchase of abc is an example of related diversification. some firms that engage in related diversification aim to develop and exploit a core competency to become more successful.

which strategy best-fits your business? for example, a phone company that adds or expands its wireless products and services by with a related diversification strategy you have the advantage of for example, a shoe producer starts a line of purses and other leather accessories; an electronics repair shop adds to its all these moves, except the polka of course, are examples of diversification. (the polka would be a company’s diversification strategy can be either related or unrelated to its original business. related, related diversification examples in pakistan, samsung unrelated diversification strategy, unrelated diversification examples in india, give recent examples of related diversification, diversification strategy ppt, concentric diversification example, diversification strategy examples in india, related linked diversification company examples, when is a company likely to choose a related diversification and (b) unrelated diversification, advantages of related diversification, related constrained diversification, horizontal diversification strategy, related diversification corporate-level strategy, combination related-unrelated diversification strategies, close related diversification, diversification strategy in hindi

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