Unilever : example of related diversification u can name some of its products.
By : Nikhil Agarwal Aishwary Bhandari Pradeep Kumar BS-B
It is a strategy that takes the organization into both new markets and products or services.
Economies of scope Corporate managerial capabilities Increase market power Respond to environmental change Spreading risk across a range of businesses Expectations of powerful stakeholders
It is a strategy development beyond current products and markets , but with the capabilities or value network of the organization.
Related diversification options for an organization BACKWARD INTEGRATION Raw materials Components Machinery Product/process manufacture manufacture manufacture research/design Raw materials Components Machinery Financing supply supply supply Transport HORIZONTAL INTEGRATION Competitive products Organization By-products Complementary products FORWARD INTEGRATION Distribution Marketing Repairs and Transport outlets information servicing
Poor understanding of how diversification activities will “fit” or be coordinated with existing businesses. Most problems because launch of new business require considerable time and investment. Difficult to assess the risks associated with new investment opportunity.
It is the development of products or services beyond the current capabilities or value network. It is often referred as a conglomerate strategy. Involves diversifying into businesses with No strategic fit No meaningful value chain relationships No unifying strategic theme
By exploiting dominant logics Work effectively in underdeveloped markets