What is difference between divercificatin and expansion?
Answers
Answer:
Expansion through Diversification. ... Simply, conglomerate diversification is when the firm acquires or develops the product and services that may or may not be related to the existing range of product and services.
Explanation:
There are three types of diversification techniques:
Concentric diversification. Concentric diversification involves adding similar products or services to the existing business. ...
Horizontal diversification. ...
Conglomerate diversification.
The same happens in all liquids and gases, driving natural heat transfer upwards in homes, oceans, and weather systems. Solids also undergo thermal expansion. Railroad tracks and bridges, for example, have expansion joints to allow them to freely expand and contract with temperature changes.
Answer:
When a business enterprise increases the variety and catalogue of the products offered by it, the process involved is called diversification of business enterprise. Expansion of a business enterprise is the increase in the consumer base served by an enterprise over a period of time.
Explanation:
Diversification is a corporate strategy to enter into a new products or product lines, new services or new markets, involving substantially different skills, technology and knowledge.
Diversification is one of the four main growth strategies defined by Igor Ansoff in the Ansoff Matrix:[1]
Products
Present New
Markets Present Market penetration Product development
New Market development Diversification
Ansoff pointed out that a diversification strategy stands apart from the other three strategies. Whereas, the first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line, the diversification usually requires a company to acquire new skills and knowledge in product development as well as new insights into market behavior simultaneously. This not only requires the acquisition of new skills and knowledge, but also requires the company to acquire new resources including new technologies and new facilities, which exposes the organisation to higher levels of risk.[2]
Note: The notion of diversification depends on the subjective interpretation of “new” market and “new” product, which should reflect the perceptions of customers rather than managers. Indeed, products tend to create or stimulate new markets; new markets promote product innovation.
Product diversification involves addition of new products to existing products either being manufactured or being marketed. Expansion of the existing product line with related products is one such method adopted by many businesses. Adding tooth brushes to tooth paste or tooth powders or mouthwash under the same brand or under different brands aimed at different segments is one way of diversification. These are either brand extensions or product extensions to increase the volume of sales and the number of customers.
Business expansion is growth by increasing the number of collection points your customers can buy products and services from you.
All successful business start-ups face the question of handling business expansion and growth. Business expansion is a stage in a company’s cycle that is fraught with both opportunities and risks. The growth of the business can carry with it an increase in financial fortune for owners and increased pressure. Expansion is usually the ultimate endorsement of the business’s initial concept, and the subsequent effort to bring that vision to fruition.
Growth causes a variety of changes, all of which present different challenges and pressures in different areas of the business. Growth means that new employees will be hired who do not understand the cultural aspects of the business or the journey you have taken to arrive at this point, but it is up to you and the existing management team to assist with this process.
Growth could also mean that the company’s management will become less centralised, and this may raise the levels of unease amongst the staff and managers. So in this scenario having a firm and structured business and management strategy will not guarantee success but the percentage of success with be improved.
Regardless of the path you take, success is in your hands along with failure. The key is to have the ambition that you had when you first launched your business and use the same vigour to launch the next stage of your business. Good luck and happy ______________ (fill in the blanks).
Liked this post? You may find our Leadership or Management blog when managing an expansion or diversification transition, may help.