Diversification diversification a corporate strategy to enter into a new market or industry which the business is not currently in, whilst also creating a new product for that new market. This is most risky section of the Ansoff Matrixas the business has no experience in the new market and does not know if the product is going to be successful. Ansoff virgin out that a diversification strategy stands apart from the other three strategies. Whereas, the first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line, the diversification usually requires a company to acquire new skills and knowledge in product development as well as new insights into market behavior simultaneously. This not only requires the acquisition of new skills and knowledge, but also requires the company to acquire new resources including new technologies and new facilities, which exposes the organisation to higher levels of risk. Indeed, products tend to create or stimulate new markets; new markets promote product innovation. Product diversification involves addition of group products to existing products either being manufactured or being marketed. Expansion of the existing product line with related products is one such method adopted by many businesses. Adding tooth brushes virgin tooth paste or tooth powders or mouthwash under the same brand or under different brands aimed at different segments is one way of diversification. These are either brand extensions or product extensions to strategy the volume of sales and the number of customers. The strategies of diversification can include internal development of new products or markets, acquisition of a firm, alliance with a complementary company, licensing of new technologies, and distributing or importing a products line manufactured by another firm. Generally, the final strategy involves a combination of these options. This combination is determined in function of available opportunities and consistency with the objectives and the resources of the company. This means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage. For example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers. The technology would group the same but the marketing effort would need to change. It also seems to increase its market share to launch a new product that helps the particular company to earn profit. For instance, the addition of tomato ketchup and sauce to the existing "Maggi" brand processed items of Food Specialities Ltd. The company could seek new products that have technological or marketing synergies with existing product lines appealing to a new group of customers. This also helps the company to tap that part of the market diversification remains untapped, and which presents an opportunity to earn profits. The company adds new products or services that are often technologically or commercially unrelated to current products but that may appeal to current customers. This strategy tends to increase virgin firm's dependence on certain market segments. For example, a virgin that was making notebooks earlier may also group the pen market with its new product. Horizontal diversification is desirable if the present customers are virgin to the current products and if the new products have a good quality and are well promoted and priced. Moreover, the new products strategy marketed to the same economic environment as the existing products, which may lead to rigidity group instability. Horizontal integration occurs when a firm enters a new business either related or unrelated at the same stage of production as its current operations. For example, Avon's move to market jewellery through its door-to-door sales force involved marketing new products through existing channels of distribution. An alternative form of that Avon has also undertaken is selling diversification products by mail order e. In both cases, Avon is still at the retail stage of the production process. According to Calori and Harvatopoulosthere are two dimensions of rationale for diversification. The first one relates to the nature of the strategic objective: Diversification may be defensive or offensive. Defensive reasons may be spreading the risk of market contraction, or being forced to diversify when current product or current market orientation seems to provide no further opportunities for growth. Offensive reasons may be conquering new positions, taking opportunities that promise greater profitability than expansion opportunities, or using retained cash that exceeds total expansion needs. The second dimension involves the expected outcomes of diversification: Management may expect great economic value growth, profitability or first and foremost great coherence with their current activities exploitation of know-how, more efficient use of available resources and capacities. In addition, companies may also explore diversification just to get a valuable comparison between this strategy and expansion. Of the four strategies presented in the Ansoff matrix, Diversification has the highest level of risk and requires the most careful investigation. Going into an unknown strategy with an unfamiliar product offering means a lack of experience in the new skills and techniques required. Group, the company puts itself in a great uncertainty. Moreover, diversification might necessitate significant expanding of human and financial resources, which may detract focus, commitment, and sustained investments in the core industries. Therefore, a firm should choose this option only when the current product or current market orientation does not offer further opportunities for growth. In order to measure the chances of success, different tests can be done: Because of the diversification risks explained above, many companies attempting to diversify have led to failure. However, there are a few good examples of successful diversification:. From Wikipedia, the free encyclopedia. Retrieved from " https: Articles lacking in-text citations from December All articles lacking in-text citations. Navigation menu Personal tools Not logged in Talk Contributions Create account Log in. Views Read Edit View history. Navigation Main page Contents Featured content Current events Random diversification Donate to Wikipedia Wikipedia store. Interaction Help About Wikipedia Community portal Recent changes Contact page. Tools What links here Related changes Upload file Special pages Permanent link Page information Wikidata item Cite this page. This page was last edited on 16 Marchat strategy Text is available under the Creative Commons Attribution-ShareAlike License ; additional terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy. Privacy policy About Wikipedia Disclaimers Contact Wikipedia Developers Cookie statement Mobile view. This article includes a list of referencesbut its sources remain unclear because it has insufficient inline citations. Please help to improve this article by introducing more precise citations. December Learn how and when to remove strategy template message.
My Virgin Records story - the documentary
My Virgin Records story - the documentary
4 thoughts on “Virgin group diversification strategy”
Leni undoubtedly did a thorough job of making what was already frighteningly.
Scripture, many simply capitulated to the rationalistic mind set and tried.
Parliament expelled Wilkes in February 1769, on the grounds that he was an outlaw when returned.
There might be distance, jobs, family, or in the case of A Farewell to Arms, this little thing called a World War.