Product Diversity

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  • Unilever : example of related diversification u can name some of its products.
  • Product Diversity

    1. 1. By : Nikhil Agarwal Aishwary Bhandari Pradeep Kumar BS-B
    2. 2.  It is a strategy that takes the organization into both new markets and products or services.
    3. 3.  Economies of scope Corporate managerial capabilities Increase market power Respond to environmental change Spreading risk across a range of businesses Expectations of powerful stakeholders
    4. 4.  It is a strategy development beyond current products and markets , but with the capabilities or value network of the organization.
    5. 5. 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
    6. 6.  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.
    7. 7.  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
    8. 8.  By exploiting dominant logics Work effectively in underdeveloped markets

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