What is diversification strategy? and Why does firm diversify?

Chiến lược đa dạng hóa sản phẩm/ thị trường là chiến lược cho phép doanh nghiệp gia nhập vào thị trường hoặc ngành mới hoặc chưa khai thác với các dòng sản phẩm – dịch vụ mới, bằng cách phát triển năng lực nội bộ hay thông qua mua bán sát nhập, dẫn đến những thay đổi trong cấu trúc, hệ thống quản trị và có thể hình thành quy trình quản lý khác trước đó (Ramanujan và Varadarajan 1989, trang 523- 551). Chiến lược này lần đầu được Ansoff (1957) đề cập và đưa vào là lựa chọn cuối

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Ansoff Matrix: Overview, Business Strategies and Practical Examples

The Ansoff matrix or Market Product development matrix, or market product matrix was developed by a famous researcher – Igor Ansoff in 1975. Until now, The Ansoff matrix has been used as a strategic planning tool for revenue growth at firms’ different market segments; thereby facilitating strategic managers in making decisions. Four growth strategies from

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Ansoff matrix of Vinamilk – a Vietnamese milk company

Vinamilk has penetrated deeply into the existing markets by expanding the distribution system of existing products such as condensed milk, liquid milk, powdered milk and yogurt … in all provinces with 220 distributors and 125,000 points of sales. In addition, the company has exported its products to foreign markets such as Australia, Cambodia, the Philippines,

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Related diversification or integration strategy of the firm

Related diversification or integration strategy is a strategy that goes beyond existing products and markets within current capabilities and value networks of the firm. Related diversification strategy includes 2 categories: Vertical integration includes backward integration and forward integration in the firm’s value chain. Backward integration implies the development of activities related to the firm’s inputs;

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Unrelated diversification or conglomerate strategy of the firm

Unrelated diversification is a growth strategy, in which firm develops products and markets beyond its capabilities and its value systems. Habitually called the conglomerate strategy, this strategy does not involve neither economics of scale nor economics of scope. However, many costs can occur (e.g., executive management, office administration, relations and decision-making between headquarters and the

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Diversification strategy of developing international markets

When deciding to go abroad by adopting international diversification, firm faces two main problems. The first one is the global – local dilemma concerning the standardization level of its products and services, that should be customized between countries in order to meet local market requirements. The second is the business scope, that is, firms should

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Diversification and firm competence and performance

In general, scholars agree that core competence of the firm is the primary driver of its successful diversification. In the litterature, there are four different points of views on the impact of the diversification strategy, or the relationship between the degree of diversification and firm performance.

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