this ppt is regarding how a company or business can use strategy of diversification its business.there are basically two types of diversification strategy which are adopt by business.

1. Diversification strategy
Presented by
Megha Dhingra 16PBA019
Rakesh Kumar 16PBA021
MBA

2. Content
Meaning
Advantage and disadvantage
Types of diversification strategy
Conglomerate diversification
Benefit
Concentric diversification
Benefit

3. Meaning
• Diversification strategy to enter
into a new market or industry in
which the business doesn't
currently operate, while also
creating a new product for that
new market.

4. Advantage and disadvantage
Financial
Considerations
Resource
Constraints
Stakeholder
Perceptions
Impact on Risk

5. Types of
diversification
strategy
Horizontal Diversification
Vertical Diversification
Concentric diversification
Conglomerate(Heterogeneous)
diversification

6. Conglomerate
It is growth strategy that
involves adding new
products or services that
are significantly different
from the organization's
present products or
services.
•Agriculture
•Restaurants

7. ITC ltd company

8. Strategy use
by :
Companies that are
financially distressed.
Companies that have bright
growth prospects but are
short on investment capital.
Whose assets are "undervalued“
opportunities may exist to acquire such
companies' for less than full market value
and make substantial capital gains by
reselling their assets and businesses for
more than their acquired costs.

9. Benefit
Business risk
Capital resources can be invested in whatever
industries offer the best profit prospects.
Company profitability is somewhat more
stable because hard times in one industry
may be partially offset by good time in
another.

10. Concentric diversification
• It is a type of business strategy where a
company acquires or creates new products
or services to reach more consumers.
Product are related.
• When an organization takes up an activity
in such a manner that is related to the
existing business definition of one or more
of firms businesses.
• customer’s functions or alternative
technologies, it is called concentric
diversification. Definition: According to
Business Dictionary.com ‘a company uses
Concentric diversification as a means of
entering new consumer markets and
driving sales in those markets ;

12. TYPES
•Marketing-related concentric
diversification
•Technology-related concentric
diversification
• Marketing and Technology-related
concentric diversification

16. Benefit
Achieving Business
Synergy
Improve Product
Development
Increased Market Share

17. Six guidelines when related diversification may be an
effective strategy as follows
• When an organization competes in a no growth or a slow growth industry.
• When adding new, but related, products would significantly enhance the sale
of current products.
• When new, but related products could be offered at highly competitive
prices.
• When new, but related products have seasonal sales levels that counter
balance an organic cycle.
• When an organization ‘s products are currently in the declining stage of the
product life cycle.
• When an organization has a strong management team.