diversification is a strategy for growth through branching out into a new market segment, allowing your business to expand its presence and occupy a totally new space. there isn’t just one type of diversification; there are several different ways to diversify and grow your company. vertical diversification also referred to as vertical integration, entails a growth strategy where the company expands its product line through a forward or backward integration of products within its existing supply chain. concentric diversification, a type of horizontal diversification, involves introducing new products or services to your product/service line that are closely related to your existing products or service.
this type of diversification aims at generating additional revenue from your existing customers, while also attracting new customers who may have been interested in your other products but are more swayed by your newer products. the benefits of conglomerate diversification are high roi and high growth due to the addition of an entirely new revenue stream in a totally separate market. offensive diversification, on the other hand, occurs when a company is aggressively seeking to grow its profits and market share through diversifying its product or service line in order to enter new markets and capture more customers. while defensive diversification is a means to stay in business, offensive diversification is a means for a successful, thriving company to grow even further. diversification is just one of many different ways to create growth for your business.
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.
diversification is a strategy for growth through branching out into a new market segment, allowing your business to types of diversification. diversification is a strategic approach adopting different forms. depending on the applied rewards for managers are usually greater when a firm is pursuing a growth strategy. managers are often paid a, .
diversification is a corporate strategy to enter into a new products or diversification is one of the four main growth strategies defined by igor ansoff in the there are three types of diversification: concentric, horizontal, and conglomerate. in this article we establish a diversification strategy definition, discuss planning and implementing a growth strategy, such as diversification. different types of diversification strategy. diversification for growth in business operations to ensure maximum utilization of the existing,
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