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Benefits And Costs Of Related Diversification Pdf

benefits and costs of related diversification pdf

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Diversification strategies, in particular those associated with acquisition activity, offer companies an opportunity for growth in a less restricted en. Limmack, R. Emerald Group Publishing Limited.

From Competitive Advantage to Corporate Strategy

Related Diversification is the most popular distinction between the different types of diversification and is made with regard to how close the field of diversification is to the field of the existing business activities. Related Diversification occurs when the company adds to or expands its existing line of production or markets. In these cases, the company starts manufacturing a new product or penetrates a new market related to its business activity. Under related diversification the company makes easier the consumption of its products by producing complementing goods or offering complementing services.

For example, a shoe producer starts a line of purses and other leather accessories; an electronics repair shop adds to its portfolio of services the renting of appliances to the customers for temporary use until their own are repaired.

This type of diversification is used mostly by small businesses because it is less risky. In the majority of cases it does not require big investments and owners feel more secure because they know the opportunities and threats in the field of their main business activities. However, sometimes this diversification does not bring the expected results and profits.

Most often the reason for this is the underestimation of accompanying problems and the need of knowledge and skills in the field of change management, cultural differences, human resource management layoffs, quitting, promoting, hiring and so on. However, the reason for not meeting the results and expectations of the diversification may be the overestimation of the expected benefits and profits from the synergy, during the preliminary analysis. What is Diversification? Related Diversification Related Diversification is the most popular distinction between the different types of diversification and is made with regard to how close the field of diversification is to the field of the existing business activities.

Experts have formulated two basic fields in relation to: Opportunities for sharing resources : when all kinds of tangible and intangible resources can be shared or "copied" and the same trademark can be used.

Opportunities for strategic integration: when the integration of marketing strategies of two businesses brings benefits and the integrated efforts provide additional competitive advantages. All rights reserved.

Related Diversification

The effects of diversification on financial performance are well-established, less so the way in which diversification influences company behaviour towards stakeholder demand and social concern. This paper investigates the relationship between business diversification and corporate social performance CSP in an industrial setting, in Indonesia. CSP is measured with an index constructed from content and disclosure analysis of annual company reports in line with global reporting initiative standards. A sample of listed manufacturing companies from the Indonesian Stock Exchange is used to estimate a lagged multiple regression model to show that industry-level diversification does not have an effect on CSP. However, distinguishing between related and unrelated diversification produces a different outcome whereby, related diversification is negatively and statistically significantly correlated with CSP.

Related Diversification is the most popular distinction between the different types of diversification and is made with regard to how close the field of diversification is to the field of the existing business activities. Related Diversification occurs when the company adds to or expands its existing line of production or markets. In these cases, the company starts manufacturing a new product or penetrates a new market related to its business activity. Under related diversification the company makes easier the consumption of its products by producing complementing goods or offering complementing services. For example, a shoe producer starts a line of purses and other leather accessories; an electronics repair shop adds to its portfolio of services the renting of appliances to the customers for temporary use until their own are repaired.

This study examines the impact of resource configuration, specifically diversification and resource concentration, on the performance of business groups in an emerging economy. Based on the data collected from Taiwanese business groups from to , this study finds that resource concentration positively influences the performance of business groups, while diversification has a negative impact on the performance of business groups. The findings of this study provide support to the resource-based view and the market power perspective of business groups. This study also finds that the appropriate organizational form may change over time, confirming the institution-based view of business groups in emerging economies. This is a preview of subscription content, access via your institution. Rent this article via DeepDyve.


Key words: BIS group, diversification, value chain, competitive advantage One of the biggest benefits of company growth is the reduced costs through economies Both the related and unrelated types of business diversification have ad- vantages reddingvwclub.org​reddingvwclub.org


Related Diversification

Diversification, resource concentration, and business group performance: Evidence from Taiwan

Corporate strategy, the overall plan for a diversified company, is both the darling and the stepchild of contemporary management practice—the darling because CEOs have been obsessed with diversification since the early s, the stepchild because almost no consensus exists about what corporate strategy is, much less about how a company should formulate it.

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Итальянец перевел взгляд на свой маленький потрепанный мотоцикл и засмеялся. - Venti mille pesete. La Vespa. - Cinquanta mille. Пятьдесят тысяч! - предложил Беккер. Это почти четыреста долларов. Итальянец засмеялся.

 Может быть, и нет, - сказала Сьюзан.  - Во множестве шифров применяются группы из четырех знаков. Возможно, это и есть ключ. - Вот именно, - простонал Джабба.  - Он над вами издевается.

 Ее зовут… Не отключайся, дружище… - Роса… - Глаза Клушара снова закрылись. Приближающаяся медсестра прямо-таки кипела от возмущения. - Роса? - Беккер сжал руку Клушара. Старик застонал.

 Я же говорила. От этого кольца мне было не по .

Стратмор медленно приближался к застывшему в гротескной лозе телу, не сводя с него глаз. Он схватил убитого за запястье; кожа была похожа на обгоревший пенопласт, тело полностью обезвожено. Коммандер зажмурился, сильнее сжал запястье и потянул.

Все свои дни он посвящал организации распорядка чужой жизни. В положении личного помощника директора имелись и определенные преимущества: роскошный кабинет в директорских апартаментах, свободный доступ в любой отдел АН Б и ощущение собственной исключительности, объяснявшееся обществом, среди которого ему приходилось вращаться. Выполняя поручения людей из высшего эшелона власти, Бринкерхофф в глубине души знал, что он - прирожденный личный помощник: достаточно сообразительный, чтобы все правильно записать, достаточно импозантный, чтобы устраивать пресс-конференции, и достаточно ленивый, чтобы не стремиться к большему. Приторно-сладкий перезвон каминных часов возвестил об окончании еще одного дня его унылого существования.

Diversification Strategies: Related and Unrelated Diversification

 Убедительно.  - Сьюзан нахмурилась.

3 Comments

  1. Grosvenor A.

    13.12.2020 at 23:03
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  2. Victor D.

    17.12.2020 at 01:17
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    Related diversification, unrelated diversification, executive leadership style, ultimately to cost advantages (Teece, ; Wan et al., ).

  3. Spiro L.

    18.12.2020 at 01:51
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    Request PDF | Benefits and Costs of Diversification for Firms in Chapter 11 | Abstract This Prior research shows that diversification may benefit both firms and optimism in analysts' forecasts of earnings is related to the costs and benefits to.

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