MGT 301 Chapter 8: Corporate Diversification

Types of corporate diversification: Unrelated diversification

no competency linkages in products, services, technology, or distribution between businesses

Types of corporate diversification: Related - linked

only some businesses share competencies in products, services, technology, or distribution

Types of corporate diversification

1) Single business firm 2) Dominant-business firm 3) Related-constrained firm 4) Related-linked 5) Unrelated diversification (conglomerate)

Geographic diversification

a strategy in which a firm is active in several different countries

Product Diversification

a strategy in which a firm is active in several different product markets

Types of corporate diversification: Related - constrained firm

all businesses share competencies in products, services, technology, or distribution

Diversification

an increase in the variety of products and services a firm offers or markets and the geographic regions in which it competes

Product-market diversification

corporate strategy in which a firm is active in several different product markets and several different countries

Economies of Scope

when the value of the products or services a firm sells increase as the number of businesses in which that firm operates increases

Types of corporate diversification: Dominant business firm

where a company derives 70-95% of its revenue from a single business, but it pursues at least one other business activity

Types of corporate diversification: Single business firm

where a company derives 95% or more of its revenue from one business