legal, political, economic, technological, social)
(2) The industry??s competitive environment may cause it.
(3) Specific characteristics of the firm itself may cause it.
(4) Firm performance objectives may drive it.
(Ramanujam & Varadarajan, 1989)
When Should a Firm Diversify?
It is faced with diminishing growth prospects in the present business
It has opportunities to expand into industries whose technologies and products complement its present business
It can leverage existing competencies and capabilities by expanding into businesses where these resource strengths are key success factors
It can reduce costs by diversifying
into closely related businesses
It has a powerful brand name it can
transfer to products of other businesses to
increase sales and profits of these businesses
Strategies for Entering New Businesses
Acquisition of an Existing Company
Most popular approach to diversification
Advantages
Quicker entry into target market
Easier to hurdle certain entry barriers
Acquiring technological know-how
Establishing supplier relationships displayed 300 characters
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legal, political, economic, technological, social)
(2) The industry??s competitive environment may cause it.
(3) Specific characteristics of the firm itself may cause it.
(4) Firm performance objectives may drive it.
(Ramanujam & Varadarajan, 1989)
When Should a Firm Diversify?
It is faced with diminishing growth prospects in the present business
It has opportunities to expand into industries whose technologies and products complement its present business
It can leverage existing competencies and capabilities by expanding into businesses where these resource strengths are key success factors
It can reduce costs by diversifying
into closely related businesses
It has a powerful brand name it can
transfer to products of other businesses to
increase sales and profits of these businesses
Strategies for Entering New Businesses
Acquisition of an Existing Company
Most popular approach to diversification
Advantages
Quicker entry into target market
Easier to hurdle certain entry barriers
Acquiring technological know-how
Establishing supplier relationships displayed 300 characters
