diversification

(noun)

A corporate strategy in which a company acquires or establishes a business other than that of its current product.

Related Terms

  • vertical integration
  • horizontal integration
  • integration

Examples of diversification in the following topics:

  • Growth Strategy

    • Diversification – A corporate strategy in which a company acquires or establishes a business other than that of its current product.
    • Diversification can occur either at the business-unit level or at the corporate level.
    • At the business-unit level, diversification is most likely to involve expansion into a new segment of an industry in which the business already competes.
    • Distinguish between the varying integrations and diversifications that allow businesses to pursue strategic growth
  • Consolidation Strategy

    • The following motives are considered to improve financial performance: economy of scale, economy of scope, increased revenue or market share, cross-selling, synergy, taxation, geographical or other diversification, resource transfer, vertical integration, and hiring.
    • Other motives for merger and acquisition that may not add shareholder value include diversification, manager overconfidence, empire-building, and management compensation.
  • PESTEL: A Framework for Considering Challenges

    • This trend affords the food industry opportunities to create products that meet this social desire; as a result, candy manufacturers may want want to consider diversification.
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