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Essay / Research Paper Abstract
"Diversified businesses produce such a richness of skills, efforts, resources, markets and products/services that it would be hard to refuse any reasonable opportunity for diversity". This 3 page paper discusses diversity in this context and considers the grounds on which an organization should diversify to take advantage of the opportunities mentioned above and grounds when it would not be an advantage to do this. The bibliography cites 2 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEdivertn.rtf
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Unformatted sample text from the term paper:
at which time it may have the opposite affect. There are two types of diversification; related diversification and unrelated diversification. Related diversification takes place where a firm enters into markets
that are linked to the existing products, for example, when Apple started selling MP3 tracks through iTuines, this was related diversification,. The firm was entering into a new product area,
but it complimented their existing product range. Related diversification can be argued as a potential strategic tool for a firm that wants to increase sales. The benefits of related diversification
include the existing knowledge that a firm has related to that product or service and the market and/or the consumers. In many
instances the firm may be able to take advantage of existing knowledge, resources, capabilities and/or contacts. This can reduce the costs of expansion into the new area (Mintzberg et al,
2003). For example, the iTunes launch was supported with the iPods, which are restricted to the iTunes service. This increases business through marketing within the product groups. Where the product
sold is complimentary to the existing goods or services of the company and the same consumer group and can be a strategy used to supports Ansoffs product expansion strategy, where
a firm seeks to sell new goods to the same market (Kotler, 2003). This is a strategy where there is the use of existing resources to help support a new
strategy. This is not the only type of related diversification, some forms of diversification may not appear as closely linked. For example, related diversification may take place using the same
skills and competences of a firm, but into a new market. For example, there may be the decision of a fish canning factory to start canning tomatoes in the summer.
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