unrelated diversification occurs when a company enters an industry that bears no significant resemblance to the company’s current industry or industries. while vertical integration entails a company entering a new segment of an existing value chain, diversification necessitates entering an entirely new value chain. this is an excellent example of unrelated diversification, which occurs when a company enters an industry that bears no significant resemblance to the company’s previous industry or industries. related diversification is when a company enters a new industry that shares significant similarities with its existing industry or business lines.
to grow more successfully, some companies engage in relevant diversification with the goal of developing and exploiting a core strength. for example, a phone company, might decide to venture into the television or radio industries. its unrelated diversification because it has nothing to do with the current business. when a company enters a new industry that shares significant similarities with its existing industry or industries, this is known as related diversification. she is also an author, a social media manager in the business field as well as a life coach with over a biennium of using real-life experience to create innovative solutions for businesses across the globe.
many firms accomplish this through a merger or an acquisition, while others expand into new industries without the involvement of another firm. related diversification occurs when a firm moves into a new industry that has important similarities with the firm’s existing industry or industries. some firms that engage in related diversification aim to develop and exploit a core competency to become more successful. through competing in this business, honda developed a unique ability to build small and reliable engines. sometimes the benefits of related diversification that executives hope to enjoy are never achieved. thus, on the surface, the acquisition of 7up by philip morris seemed to offer the potential for philip morris to take its existing marketing skills and apply them within a new industry.
it’s hard to imagine the logic behind such a move, but coca-cola did just this when it purchased columbia pictures in 1982 for $750 million. this is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries. according to ceo geoffrey booth, the zippo is viewed by consumers as a “rugged, durable, made in america, iconic” brand. zippo executives expect to sell about 12 million lighters this year, which is a 50 percent decline from zippo’s sales levels in the 1990s. harley-davidson, for example, once tried to sell harley-branded bottled water. although harley-davidson and starbucks both enjoy iconic brands, these strategic resources simply did not transfer effectively to the bottled water and furniture businesses.
diversification into related business lines in the same sector; an example is volkswagen’s acquisition of audi. unrelated diversification into this is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s this is a good example of unrelated diversification , which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing, .
there are three types of diversification: related diversification u2014diversifying into business lines in the same industry; volkswagen acquiring audi is an example. unrelated diversification u2014diversifying into new industries, such as amazon entering the grocery store business with its purchase of whole foods. this is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing this is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s it is when a business adds new, or unrelated, product lines or markets. for example, the same phone company might decide to go into the television business or, . what is a unrelated diversification strategy? is disney unrelated diversification? what is an example of diversification strategy? which of the following is an example of related diversification?
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