Prepared By
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Manu Melwin JoyAssistant Professor
Ilahia School of Management Studies
Kerala, India.Phone – 9744551114
Mail – [email protected]
Diversification strategies
• Firms using diversification
strategies enter entirely new
industries. While vertical
integration involves a firm
moving into a new part of a
value chain that it is already is
within, diversification requires
moving into new value chains.
Examples of Diversification strategies
• Avon's move to market
jewellery through its
door-to-door sales force
involved marketing new
products through
existing channels of
distribution.
Concentric Diversification• When an organization takes up
an activity in such a manner
that is related to the existing
business definition of one or
more of firms businesses, either
in terms of customer groups,
customer’s functions or
alternative technologies, it is
called concentric diversification.
Example of Concentric Diversification
• The addition of tomato
ketchup and sauce to the
existing "Maggi" brand
processed items of Food
Specialities Ltd. is an
example of technological-
related concentric
diversification
Conglomerate Diversification• When an organization adopts a
strategy which requires taking of
those activities which are unrelated
to the existing businesses definition
of one or more of its businesses
either in terms of their respective
customer groups, customer functions
or alternative technologies, it is called
conglomerate diversification.
Examples of Conglomerate Diversification
• Example of Indian company which have adopted apart of growth and expansion through conglomerate diversification the classic examples is of ITC, a cigarette company diversifying into the hotel industry.