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Essay / Research Paper Abstract
This 7 page paper answers questions set by the student regarding the UK company W H Smith’s and the way they changed strategy during the 1990’s from one of horizontal diversification to one which concentrated on core competences.
Page Count:
7 pages (~225 words per page)
File: TS14_TEsmiths.rtf
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Unformatted sample text from the term paper:
one where there was horizontal diversification, looking to spread threw risk and increase revenues by having income coming in from other markets. However, it was also found that there are
diseconomies of scale when competences are spread too thin. The primary products have always been those of stationary items and books, but
in the increasing competitive environment these were expanded over the years, with additions such as videos. Music, gift ideas and even the ability to purchase red letter days such as
ballooning or car racing lessons, in a box. The way in which the company operates may be seen s looking to gain
advantage by way of horizontal unrelated diversification. There has been investment in other retail outlets that also service the consumer directly. For example in an acquisition the company acquired
the DIY chain do it all, however this was not a complete success. The problem was the way in which the company had
a step learning curve and this was distracting them from their core competences, an area where there was increasing levels of competition. The interesting acquisition were those that sought to
give the company a new distribution channel in areas they already services, such as Waterstones and the books. In effect they had two routes by which to sell books and
where unable to create synergy with these businesses. The business has moved to consolidate its core competences and become more focused
on the central markets. The level of fragmentation within the company has also decreased with more centralised operation and a reduction on the level of units as well as level
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