1. CASE STUDY ON
DIVERSIFICATION STRATEGIES BY MNC’S
PRESENTED BY:
AANCHAL NARANG
PARUL GUPTA
MONICA MAHALWAL

2. HIGHLIGHTS OF CASE STUDY

3. HIGHLIGHTS OF THE CASE
The main aspect of the case shows that the international business
environment has witnessed unprecedented changes over the past
decades and so MNC’s have been continously expanding
Focuses on the major reasons that has been leading these
companies to expand
Also main focus has been on the various strategies used by MNC’s
in order to diversify.

4. INTRODUCTION TO – MNC’S
INTRODUCTION TO MNC’S
• Multinational corporations (MNCs) are huge industrial
organizations having a wide network of branches and
subsidiaries spread over a number of countries.
• MNCs practices production and provides services to
countries other than the home country.
• The two main characteristics of MNCs are their large
size and the fact that their worldwide activities are
centrally controlled by the parent companies.

5. WHEN SHOULD A MNC DIVERSIFY?
 It is faced with diminishing growth prospects in present business
 It has opportunities to expand into industries whose technologies
and products complement its present business.
 It has a powerful brand name it can transfer to products of other
businesses to increase sales and profits of these businesses

6. Need for Diversification
 Growth and expansion.
 Risk involved in single business strategy.
 Contribute towards more profit margins.
 Powerful brand name.
 To meet the utmost competition in market.

7. DIVERSIFICATION STARTEGIES OF MNC’S
There are a number of diversification strategies and some of them are
here under:
Strategies for entering new industries
 Related diversification strategies
 Unrelated diversification strategies
 Multinational diversification

8.  ENTERING A NEW BUSINESS
Joint Ventures
Mergers
Acquisitions

9.  Joint venture :
- involving two or more companies(domestic or international )
joining temporarily.
Example:Nokia with Microsoft in 2011, coco cola with Mc Donalds
 Takeovers : Microsoft takeover Skype in 2011.
 Mergers :
-Companies unite together to enhance their growth and eliminate
competition .
Example: Samsung merged with Intel’s tizen.

10. Unrelated to businesss
-Taking of those activities which are unrelated to the existing
businesses.
Example – AMWAY (U.S based ) deals in jewllery as well as
beauty products

11. Diversification of the resource base. –
-Internationalization of production that substitutes for production at
home.
JHGVHG
Example - Tommy Hilfiger(American brand)- outsources its production
to countries like India and China.
Unrelated technology
-A similar type of product is offered with a help of unrelated
technology.
Example: Nokia shifting its operating system from symbian to
android.

12.  New product line
-new type of product or service is provided with the help of related
technology.
JHGVHG
Example- Apple iphone and ipod touch.
 Similar product lines
-similar type of product is provided with the help of related technology.
Example - L'Oreal total repair shampoo and L'Oreal Paris color protect
shampoo.

13. STRATEGIC SWOT ANALYSIS
STRENGHTS WEAKNESSES
Continuing growth Not adaptable to changing
environment
Ability to create new
markets Potential conflicts.eg joint
ventures
Allocation of resources
OPPURTUNITIES THREATS
Collaboration and strategic Market changes
alliance
Technological changes
Attacking weak companies
Political disruptions

14. FUTURE OF MNC’s
 Increasing international competition.
50
45
 Global consumer awareness.
40
35
30
 Technological advancement.
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 Reduction in friction among nations.
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 Growing role of private sector inn developing
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