Скачать или смотреть Diversification Strategy - Meaning, Types, Vertical & Horizontal Diversification with examples (225)

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A diversification Strategy is an approach adopted by an organization to extend a new product line and operate in different markets.

The Diversification Strategy is a growth strategy that helps organizations to capture new markets and create a new customer base.

The Ansoff Matrix

The Ansoff Matrix is a planning tool that lays the groundwork for marketers and senior executives so that they can create a strategy for future growth.

Types of Diversification Strategy

Horizontal diversification

An organization uses Horizontal diversification when it decides to add new products or services to its unrelated product list.
The risk is less as the company can use its existing supply chain as well as customer base to achieve sales.

Example – Apple Watch from Apple

Concentric diversification

An organization uses Concentric diversification when it decides to enter a new product into a new market.  The company takes advantage of existing manufacturing processes, technical experience, and industry knowledge to boost sales.

Example – Apple using the technical knowledge of iPhone to launch iPad

Conglomerate diversification

An organization uses Conglomerate diversification when it decides to target a different market as well as customer base with unrelated product.

Example –

1. Amazon Web Services
2. Tesla – Electric Cars to Space X

Vertical diversification

An organization uses Vertical diversification when it decides to align two or more production stages to move up or down the supply chain.
These were earlier operated by other companies but now the organization decides to take over the functioning.

Forward Vertical Diversification

Forward Vertical Diversification occurs when the organization is at the starting point of the supply chain and wants to control the operations that are further down the chain.

Example – McDonald’s

Backward Vertical Diversification

Backward Vertical Diversification occurs when the organization is at the end of the supply chain and expands its role by purchasing a company that supplies the product needed for production.

Example – Walmart

Reasons for Diversification

Increase revenue growth
Tap more markets
Use existing customer base, resources, and brand recognition
Low risks
Economies of scale
Maintain profitability
Cross-selling
Gain technological capabilities
Optimize resources

Diversification Strategy Example

1. Apple Car

This video is on Diversification Strategy and it has the following sub-topics.

Time Stamps

0:00 Diversification Strategy Introduction
00:21 What is Diversification Strategy?
00:51 The Ansoff Matrix
01:56 Types of Diversification Strategy
02:01 Horizontal diversification
02:30 Concentric diversification
02:55 Conglomerate diversification
03:14 Example 1 - Amazon’s - Amazon Web Services (AWS)
03:28 Example 2: Tesla – Electric Cars to Space X
04:02 Vertical diversification
04:32 Forward Vertical Diversification
05:14 Backward Vertical Diversification
05:37 Reasons for Diversification
06:08 Diversification Strategy Example
06:11 Diversification Strategy Example – Apple Car