What are different reason for diversification and acquisition?
Answers
There are a number of organizations that are currently making use of diversification acquisition strategy. Some of the benefits of using diversification acquisition are listed here below:-
• This strategy can prove helpful in increasing the productivity of capital. The possibilities are much better when skilled knowledge is combined with industry knowledge.
• Long term average business cost in the current market can also be reduced for investments that are closely related to each other in the market.
• Critical mass can also be generated in any field of competence for resources that are important to outperform the market trend.
• It can also help the organization to reduce the rick factor involved to any product.
• The cash flow can also be enrooted from a well performing company to a not so well performing company or unit. This will further eliminate the chances of businesses to individually raise funds and capitals.