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What is Diversification Strategy?

It is an approach of a business organisation to get access into a new industry or new markets in which this organisation does not operate currently. In the meantime, it also creates a new commodity for the fresh market. This is a risky section as the business entering the new market might have no experience and have no idea whether the new product will be a hit or a failure in the market.

This method is one of the most important of four growth plan. The approach of diversification includes markets or new products’ internal development, firm’s acquisition, alliance with complementary organisation, new technologies’ licensing and importing or distributing goods which are manufactured by some other firm.Β  A detailed discussion is given in our Diversification Strategies assignment help.

There are three types of diversification strategies horizontal, concentric and conglomerate. All three are discussed below in brief.

Horizontal Method

In this approach, a firm adds new goods or services which are often commercially or technologically not related to existing goods, but it may be attractive to present customers. This method increases a company’s dependence on specific segments of a market. Order our Diversification Strategies assignment help to get more information.

Concentric Method

In this approach, the technology which is used between two industries is similar. It means a firm can use the technical knowledge to gain some advantages over others. For example, any company which produces industrial adhesives can diversify by selling adhesives via retailers.Β  In such a case the marketing ways need to vary, but the technological process is somewhat similar.

Other than these two there is also conglomerate which is another process where new services or products are added to existing goods. To know every type of approach in detail, go through our Diversification Strategies homework help.

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