Diversification strategies

Corporate Level Strategies

Prepared By

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Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

Diversification strategies

Diversification strategies

• Firms using diversification

strategies enter entirely new

industries. While vertical

integration involves a firm

moving into a new part of a

value chain that it is already is

within, diversification requires

moving into new value chains.

Examples of Diversification strategies

• Avon's move to market

jewellery through its

door-to-door sales force

involved marketing new

products through

existing channels of

distribution.

Concentric Diversification• When an organization takes up

an activity in such a manner

that is related to the existing

business definition of one or

more of firms businesses, either

in terms of customer groups,

customer’s functions or

alternative technologies, it is

called concentric diversification.

Example of Concentric Diversification

• The addition of tomato

ketchup and sauce to the

existing "Maggi" brand

processed items of Food

Specialities Ltd. is an

example of technological-

related concentric

diversification

Conglomerate Diversification• When an organization adopts a

strategy which requires taking of

those activities which are unrelated

to the existing businesses definition

of one or more of its businesses

either in terms of their respective

customer groups, customer functions

or alternative technologies, it is called

conglomerate diversification.

Examples of Conglomerate Diversification

• Example of Indian company which have adopted apart of growth and expansion through conglomerate diversification the classic examples is of ITC, a cigarette company diversifying into the hotel industry.