- Concentric diversification.
- Horizontal diversification.
- Conglomerate diversification (or lateral diversification)
What is concentric diversification?
a growth strategy in which a company seeks to grow and develop by adding new products to its existing product lines to attract new customers ; also called convergent diversification.
What are the 4 methods of diversification?
- Horizontal diversification.
- Vertical diversification.
- Concentric diversification.
- Conglomerate diversification.
- Defensive diversification.
- Offensive diversification.
What is concentric and conglomerate diversification?
The concentric strategy is used when a firm wants to increase its products portfolio to include like products produced within the same company, the horizontal strategy is used when the company wants to produce new products in a similar market, and the conglomerate diversification strategy is used when a company starts ...
What is horizontal diversification?
a growth strategy in which a company seeks to add to its existing lines new products that will appeal to its existing customers .
What are the 2 types of diversification?
- Concentric diversification. Concentric diversification involves adding similar products or services to the existing business. ...
- Horizontal diversification. Horizontal diversification involves providing new and unrelated products or services to existing consumers. ...
- Conglomerate diversification.
What is diversification example?
For example, an auto company may diversify by adding a new car model or by expanding into a related market like trucks . ... If a company is expanding into industries that are unrelated to its current business, then it’s engaging in conglomerate diversification.
Is diversification a good strategy?
Diversification can help an investor manage risk and reduce the volatility of an asset’s price movements . ... You can reduce the risk associated with individual stocks, but general market risks affect nearly every stock and so it is also important to diversify among different asset classes.
What are the benefits of concentric diversification?
Concentric diversification allows businesses to achieve large goals with smaller working parts and less of a financial cost . A business owner that employs a concentric diversification strategy seeks to broaden his distribution network without going too far afield in what he offers his target audience.
Which company is an example of concentric diversification?
Concentric diversification refers to the development of new products and services that are similar to the ones you already sell. For example, an orange juice brand releases a new “smooth” orange juice drink alongside it’s hero product, the orange juice “with bits”.
What are the diversification methods?
The strategies of diversification can include internal development of new products or markets, acquisition of a firm , alliance with a complementary company, licensing of new technologies, and distributing or importing a products line manufactured by another firm.
What is vertical diversification example?
This means vertical diversification usually means buying out either a supplier or a customer . For example, a soda manufacturer could vertically diversify by buying an aluminum manufacturer or a company that installs and maintains vending machines.
What is retrenchment strategy example?
A great example is how P&G the world’s largest consumer products maker focused to improve revenue and profit . Using the Retrenchment strategy P&G dropped almost 100 of its product categories and focused on the key product to maximize long-term value and create exciting opportunities within the businesses.
What is the difference between horizontal and vertical diversification?
Horizontal integration is when a business grows by acquiring a similar company in their industry at the same point of the supply chain. Vertical integration is when a business expands by acquiring another company that operates before or after them in the supply chain.
What is a horizontal strategy?
A horizontal acquisition is a business strategy where one company takes over another that operates at the same level in an industry . ... Horizontal integrations help companies expand in size, diversify product offerings, reduce competition, and expand into new markets.
What is difference between horizontal and vertical?
A vertical line is any line parallel to the vertical direction. A horizontal line is any line normal to a vertical line. Horizontal lines do not cross each other . Vertical lines do not cross each other.
