answersLogoWhite

0


Best Answer

Diversification allows for firms to move away from relying on single brand/service lines. It also allows for them to survive by adapting to changing markets and Demographics.

User Avatar

Wiki User

9y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: Why does the firm use diversification strategy?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

When diversification involves additions of a business related to the firm in terms of technology markets or products it involves?

Concentric Diversification


Define Microsoft's level of diversification strategy it is using?

concentric


What is Procter and gamble corporate level strategy?

Related diversification


Which of these is an attractive strategy for a cash cow division?

concentric diversification


Diversification is an investment strategy to?

Diversification enables the investor to reduce risk by spreading investments among different companies and types of investing.


What is concentric diversification?

concentric diversification Type of diversification where a firm acquires or develops new products or services (closely related to its core business or technology) to enter one or more new markets.


What are the advantages of diversification strategies?

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)


What are strategy implementation?

How can a firm implement this Strategy.


Which one of the following is a defensive strategy Diversification Vertical integration Concentration or Divestiture?

Divestiture


What Diversification is an investment strategy to?

reduce risk by spreading investments among several assets.


What is a diversify?

A diversified trust is a comprehensive wealth management firm that is employee-owned. The firm is based in the Southeast states such as Tennessee, Georgia and North Carolina.


What is extender strategy?

The extender strategy is when a firm expands into foreign markets that are similar to their current market. They use strategies that are currently successful to expand the business.