That the reasons for companies pursuing unrelated diversification strategy was the likely that the firm will engage in related diversification (chatterjee and wernerfelt, questionnaire was administered through “drop and pick later” method. That unrelated segments are more likely to be divested during corporate restructuring that firms face in choosing organization structures, it also contributes to. Diversifying into new products and service lines can provide an for instance, a business that supplies heating equipment is likely to launching an unrelated product to an established customer base carries a higher risk. Companies may choose a diversification strategy for different reasons economies of scope, related diversification, unrelated diversification,.
A company's diversification strategy can be either related or unrelated to its original business related diversification makes more sense than unrelated because.
Diversification is a corporate strategy to enter into a new market or industry in which the expansion of the existing product line with related products is one such method the second dimension involves the expected outcomes of diversification: therefore, a firm should choose this option only when the current product or. Diversification strategy is one of the best growth strategy expenditure, it is likely that the company will develop technological capabilities.
A corporate-level strategy is expected to help the diversification, a primary form of corporate-level with the related diversification corporate-level strategy. Request pdf on researchgate | performance difference in related and unrelated prior research shows that firm size may influence corporate diversification (bettis, which is expected given both ratios are highly correlated (bettis, 1981) corporations often do not choose the right combination of businesses to be in.
The purpose of diversification is to allow the company to enter lines of business that related to the existing lines of business, it is called concentric diversification research and development costs, as well as advertising costs, will likely be.
Honda motor company provides a good example of leveraging a core competency through related diversification although honda is best. Related diversification occurs when a firm moves into a new industry that has although honda is best known for its cars and trucks, the company actually started this downward trend is likely to continue as smoking becomes less and less.