This case study examines diversification strategies used by multinational corporations (MNCs). MNCs have expanded their operations in recent decades due to changing business environments. They diversify to pursue growth, manage risk, and increase profits. Common diversification strategies include entering new industries through joint ventures, mergers, and acquisitions. MNCs also diversify through related and unrelated business expansion, new product lines, and internationalizing production. Strategic analysis helps MNCs leverage opportunities and address threats in pursuing diversification.

1. CASE STUDY ON
DIVERSIFICATION STRATEGIES BY MNC’S
PRESENTED BY:
AANCHAL NARANG
PARUL GUPTA
MONICA MAHALWAL

2. HIGHLIGHTS OF CASE STUDY

3. HIGHLIGHTS OF THE CASE
The main aspect of the case shows that the international business
environment has witnessed unprecedented changes over the past
decades and so MNC’s have been continously expanding
Focuses on the major reasons that has been leading these
companies to expand
Also main focus has been on the various strategies used by MNC’s
in order to diversify.

4. INTRODUCTION TO – MNC’S
INTRODUCTION TO MNC’S
• Multinational corporations (MNCs) are huge industrial
organizations having a wide network of branches and
subsidiaries spread over a number of countries.
• MNCs practices production and provides services to
countries other than the home country.
• The two main characteristics of MNCs are their large
size and the fact that their worldwide activities are
centrally controlled by the parent companies.

5. WHEN SHOULD A MNC DIVERSIFY?
 It is faced with diminishing growth prospects in present business
 It has opportunities to expand into industries whose technologies
and products complement its present business.
 It has a powerful brand name it can transfer to products of other
businesses to increase sales and profits of these businesses

6. Need for Diversification
 Growth and expansion.
 Risk involved in single business strategy.
 Contribute towards more profit margins.
 Powerful brand name.
 To meet the utmost competition in market.

7. DIVERSIFICATION STARTEGIES OF MNC’S
There are a number of diversification strategies and some of them are
here under:
Strategies for entering new industries
 Related diversification strategies
 Unrelated diversification strategies
 Multinational diversification

8.  ENTERING A NEW BUSINESS
Joint Ventures
Mergers
Acquisitions

9.  Joint venture :
- involving two or more companies(domestic or international )
joining temporarily.
Example:Nokia with Microsoft in 2011, coco cola with Mc Donalds
 Takeovers : Microsoft takeover Skype in 2011.
 Mergers :
-Companies unite together to enhance their growth and eliminate
competition .
Example: Samsung merged with Intel’s tizen.

10. Unrelated to businesss
-Taking of those activities which are unrelated to the existing
businesses.
Example – AMWAY (U.S based ) deals in jewllery as well as
beauty products

11. Diversification of the resource base. –
-Internationalization of production that substitutes for production at
home.
JHGVHG
Example - Tommy Hilfiger(American brand)- outsources its production
to countries like India and China.
Unrelated technology
-A similar type of product is offered with a help of unrelated
technology.
Example: Nokia shifting its operating system from symbian to
android.

12.  New product line
-new type of product or service is provided with the help of related
technology.
JHGVHG
Example- Apple iphone and ipod touch.
 Similar product lines
-similar type of product is provided with the help of related technology.
Example - L'Oreal total repair shampoo and L'Oreal Paris color protect
shampoo.

13. STRATEGIC SWOT ANALYSIS
STRENGHTS WEAKNESSES
Continuing growth Not adaptable to changing
environment
Ability to create new
markets Potential conflicts.eg joint
ventures
Allocation of resources
OPPURTUNITIES THREATS
Collaboration and strategic Market changes
alliance
Technological changes
Attacking weak companies
Political disruptions

14. FUTURE OF MNC’s
 Increasing international competition.
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 Global consumer awareness.
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 Technological advancement.
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 Reduction in friction among nations.
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 Growing role of private sector inn developing
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