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Unrelated diversification is a form of production expansion in which the firm enters into the production of a good or service that is unrelated to previous business activities. An example would how the Virgin conglomerate produces music but also has an airline. This is a key factor of economies of scope.
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∙ 12y ago
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When is a company likely to choose related diversification and unrelated diversification?
Hell to the prof
Does Google apply unrelated diversification?
Google applies many different types of diversification.
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.
Examples of unrelated diversification?
Unrelated diversification means moving from what you were offering to a total new product. This is like if you were offering clothes through a cloth industry, then moving onto the food industry.
When is a company likely to choose related and when unrelated diversification?
Hell to the prof
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 companies apply unrelated diversification?
Holding Companies frequently diversify into unrelated businesses. For example General Electric is present in Banking, Real Estate, Aircraft Leasing and many more industries.
What companies apply unrelated diversification in the Philippines?
one is JG Summit Holdings- conglomerate firm with numerous unlike business industries
What unrelated diversification did ITC ltd do?
Indian tobacco Company Ltd has diversified into lifestyle products , food business, packaged industry
What unrelated diversification Berkshire Hathaway used?
Berkshire Hathaway has successfully used unrelated diversification to enhance its corporate portfolio. These include apparel businesses such as Fruit of the Loom, Utility companies like Midamerican Energy, Insurance companies like GEICO. Other fields include high tech training, building, retail, candy, trains and kitchen tools.
The difference between concentric diversification and conglomerate diversification?
Concentric diversification occurs when a firm adds related products or markets. The goal of such diversification is to achieve strategic fit. Strategic fit allows an organization to achieve synergy. In essence, synergy is the ability of two or more parts of an organization to achieve greater total effectiveness together than would be experienced if the efforts of the independent parts were summed. Conglomerate diversification occurs when a firm diversifies into areas that are unrelated to its current line of business. Synergy may result through the application of management expertise or financial resources, but the primary purpose of conglomerate diversification is improved profitability of the acquiring firm. Little, if any, concern is given to achieving marketing or production synergy with conglomerate diversification.
Difference between concentric and conglomerate diversification?
Concentric diversification occurs when a firm adds related products or markets. The goal of such diversification is to achieve strategic fit. Strategic fit allows an organization to achieve synergy. In essence, synergy is the ability of two or more parts of an organization to achieve greater total effectiveness together than would be experienced if the efforts of the independent parts were summed. Conglomerate diversification occurs when a firm diversifies into areas that are unrelated to its current line of business. Synergy may result through the application of management expertise or financial resources, but the primary purpose of conglomerate diversification is improved profitability of the acquiring firm. Little, if any, concern is given to achieving marketing or production synergy with conglomerate diversification.
