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There are two main reasons to diversify: # diversification may benefit the firm's owners through increasing the efficiency of the firm # diversification decisions may reflect the preferences of the firm's managers Shareholder motivation for diversification: * econonomies of scale and scope * to gain synergies * to make use of internal capital markets * to diversify shareholder portfolios * to economise on transaction costs * identifying undervalued firms * when there is excess capacity * internal labour market * brand extension Management Motives: * pecuniary advantages * non-pecuniary (such as ego, social standing etc)
Rosina Macejkovic
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What is related diversification?
Related diversification occurs when a company expands its existing products or markets.
What is the diversification of Risk?
Diversification of risk means reduction of risk. Merely reducing risk (and thereby reducing return proportionately) doesn't amount to diversification. Diversification in its true sense represents systematic reduction of risk in such a manner that return per unit of risk increases. By K S JOLLY
What are some examples of unrelated diversification?
moving from what you were offering to a total new product, for example,if you were manufacturing clothes and then you move to food industries is a good example of unrelated diversification.
What are the Advantages and disadvantages of strategic management?
One of the advantages of strategic management is that it provides a frame-work for the decision making process which helps maintain business operation standards. A disadvantage is can impede flexibility where future options to alter management strategies may be declined.
How does diversification affect financial institions credit risk exposure?
Generally, diversification helps reduce the overall credit risk exposure for financial institutions by reducing their overall expected chargeoff rates.
What are the advantages of diversification?
to maximize the profit
What is product diversification?
The process of expanding business opportunities through additional market potential of an existing product. Diversification may be achieved by entering into additional markets and/or pricing strategies.
What is diversification strategies of reliance industry?
Reliance is pursuing unrelated diversification strategy, it is conglomerate and has expanded into various markets; namely power sector, telecommunications, infrastructure, retail etc.
What are Advantages and disadvantages of conglomerate merger?
disadvantages- unlikely economic benefits will be generated for the target or the bidder advantages- diversification
What are the disadvantages of cooperative versus competitive strategies?
What are the advantages and disadvantages to cooperative versus competitive strategies
What is Footlockers vision statement?
Foot Locker Vision Statement:"Global diversification is a vital component of the Company's strategic positioning. This diversification is unique in the athletic footwear and apparel industry and provides many distinct advantages."
What footlockers mission statement?
Foot Locker Vision Statement: "Global diversification is a vital component of the Company's strategic positioning. This diversification is unique in the athletic footwear and apparel industry and provides many distinct advantages."
What is footlockers companys mission?
Foot Locker Vision Statement:"Global diversification is a vital component of the Company's strategic positioning. This diversification is unique in the athletic footwear and apparel industry and provides many distinct advantages."
How should bill demonstrate the meaning and advantages of diversification to Mary?
Naughty M.Com student, you should refer to the textbook..... MA
What are advantages and disadvantages of coca cola company's strategies in Brasil?
There are many advantages and disadvantages of Coca Cola company's strategies in Brazil. One advantage is that Coca Cola is selling their product well.
Advantages and disadvantages of diversification?
advantages 1. more money 2.more jobs 3.tourism disadvantages 1.no local support 2.misuse of funds 3.imbalance of trade
What are diversification?
Different diversification rates for two clades of animals.
