It is a long term strategy laid out by management of the company to get into other areas which offers good profit margins. It should stand on the company resources like talent and expertise.
Hell to the prof
Agriculture diversification refer to the policy of a country to change the production of one major crop
The advantages and disadvantages of conglomerate diversification are as follows: Advantages of conglomerate diversification a. Risk spreading ? entering new products into new markets offers protection against failure of current products and markets. b. High profit opportunities ? Ability to move into high growth profitable industries especially important if current industry is in decline. c. Escape ? from the present business if competition is too hot! d. Better access to capital markets. Disadvantages of conglomerate diversification a. The dilution of shareholders earnings if diversification is into growth industries with high P/E ratios. b. Lack of a common identity and purpose in a conglomerate organization. A conglomerate will be successful only if it has high quality of management and financial ability at head office where diverse operations are brought together. c. Failure in one business will drag down the rest. d. Lack of management experience..
Concentric Diversification
Growth strategy is a corporate-level strategy that seeks to increase the level of the organisation's operations. This includes increasing sales revenues,number of employees and market share. Growth can be achieved through direct expansion,vertical integration,horizontal integration or diversification .
market development, market penetration, product development, diversification
concentric
concentric diversification
Related diversification
Diversification enables the investor to reduce risk by spreading investments among different companies and types of investing.
Divestiture
reduce risk by spreading investments among several assets.
When one talks about strategy, it implies growth. Stability is necessary for growth, but without a growth strategy can lead to stagnation.
A Horizontal Growth Strategy.
Reliance is pursuing unrelated diversification strategy, it is conglomerate and has expanded into various markets; namely power sector, telecommunications, infrastructure, retail etc.
Synergistic diversification occurs when a company expands into a new market or industry that complements its existing business operations. This strategy aims to leverage existing capabilities, resources, or expertise to create synergies and enhance overall performance. The goal is to minimize risk by diversifying while also taking advantage of potential growth opportunities.