For example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers. The second dimension involves the expected outcomes of diversification: Just two years earlier, C.
Guidelines for Concentric Diversification: Risks[ edit ] Of the four strategies presented in the Ansoff matrix, Diversification has the highest level of risk and requires the most careful investigation. A typology of diversification strategies[ edit ] Trend in product variety for some models in the USA  The strategies of diversification can include internal development of new products or markets, acquisition of a firm, alliance with a complementary company, licensing of new technologies, and distributing or importing a products line manufactured by another firm.
Another interpretation[ edit ] Horizontal integration occurs when a firm enters a new business either related or unrelated at the same stage of production as its current operations.
Both examples feature prominently in their book and clearly influenced its main ideas. For me, the two cases work very well together in exploring a range of strategic and organisational challenges associated with corporate growth and development in the multi-business firm and the various ways in which these might be approached.
An alternative form of that Avon has also undertaken is selling its products by mail order e.
Significant development The case was first published in when the Resource-Based View RBV was starting to make an impact on the strategy field. The first one relates to the nature of the strategic objective: The company could seek new products that have technological or marketing synergies with existing product lines appealing to a new group of customers.
The authors Sumantra Ghoshal died in March These strategies are known as diversification strategies. When is horizontal diversification desirable?
Following are some of the guidelines which are feasible for this strategy. There are three types of diversification: The introduction of new but related products in the new markets is considered as concentric diversification strategy.
Going into an unknown market with an unfamiliar product offering means a lack of experience in the new skills and techniques required. However, there are a few good examples of successful diversification: New relevance InClayton Christensen developed the theory of disruptive innovation to explain why mature markets can often be disrupted by late entrants that rise to market leadership based on an innovative business model.
In general, students have a strong, and understandable, preference for recent cases, and the Canon case is now more than 20 years old. Even in recent years it is quite hard for any business organization to operate in diversification mode because there are a lot of different requirements that must be taken into account by the business organization.
Virgin Group moved from music production to travel and mobile phones Walt Disney moved from producing animated movies to theme parks and vacation properties Canon diversified from a camera-making company into producing an entirely new range of office equipment.
In both cases, Avon is still at the retail stage of the production process. Defensive reasons may be spreading the risk of market contraction, or being forced to diversify when current product or current market orientation seems to provide no further opportunities for growth.
There are certain situations where the horizontal diversification strategy is much effective by the organization.
Guidelines for Conglomerate Diversification: The main insights that we are able to draw from it, and the connections that we can make to other cases, are still valued by students. The technology would be the same but the marketing effort would need to change. Prahalad and Gary Hamel had published their classic article, The core competence of the corporation in Harvard Business Review, introducing what was later to become the most widely used of the RBV concepts.
Offensive reasons may be conquering new positions, taking opportunities that promise greater profitability than expansion opportunities, or using retained cash that exceeds total expansion needs.
For example, a company that was making notebooks earlier may also enter the pen market with its new product. There are three types of diversification strategies.CANON DIVERSIFICATION STRATEGY [pic] By: NURSYAH FAHMANSYAH RIZKI () Magister Manajemen Sistem Informasi Universitas Bina Nusantara DIVERSIFICATION Definition Diversification is a form of growth marketing strategy for a company.
It seeks to increase profitability through greater sales volume obtained from. Diversification is a corporate 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.
This is the most risky section of the Ansoff Matrix, as the business has no experience in the new market and does not know if the product is going to be successful. The dominant generic competitive strategy adopted by Canon is differentiation. The company deployed its technological capabilities and know-how in fine optics, precision mechanics, microelectronics and fine chemicals to develop innovative and state-of-the-art products, which were of better quality than those of its competitors.
diversification is a strategy of a firm in which they offer a new related or unrelated product to the market. Offering a new product in presence of an existing one is diversification. There are two types of. Canon Diversification Strategy Words | 20 Pages.
BUSINESS STRATEGIC DEVELOPMENT CANON DIVERSIFICATION STRATEGY [pic] By: NURSYAH FAHMANSYAH RIZKI () Magister Manajemen Sistem Informasi Universitas Bina Nusantara DIVERSIFICATION Definition Diversification is a form of growth.
But, together with Sharp and Disney, Canon provides an excellent example for companies considering diversification without all the required strategic assets in hand.Download