Concentric Diversification

Topics: Strategic management, Management, Marketing Pages: 3 (658 words) Published: April 23, 2011
-Concentric diversification focuses on creating a portfolio of related businesses. -The portfolio is usually developed by acquisition rather than by internal new business creation -Adding new but related products or services

- there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage - It also seems to increase its market share to launch a new product that helps the particular company to earn profit (Advantages)

1Enable a firm to attain synergy by
exchange of resources and skills

2)To avail economies of scale and tax

SLIDE 2 Concentric diversification is of three types:

-Essar Group:- shipping, marine construction, oil
support services, and iron ,steel.

- Shriram Fibers Ltd.:- nylon industrial yarn,
synthetic industrial fabrics, nylon tyre cords,
fluorochemicals, fluorocarbon refrigerant
gases, ball and needle bearings
- The addition of tomato ketchup and sauce to the existing "Maggi" brand processed items of Food Specialities Ltd.

Value Chain is an analytical tool like SWOT to conduct an internal analysis while formulating a strategy. Resource Based View is another internal analytical tool. (RBV)

strategy - value chain analysis
Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Support Activities, which whilst they are not directly involved in production, may increase...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • “Optimal Versus Naïve Diversification: How Inefficient Is the 1/N Portfolio Strategy” – a Critique Essay
  • Essay on Diversification in Stock Portfolios
  • Investment Style Focused on Risk Diversification Essay
  • Concentric Circles of Concern 1 Essay
  • Are Crises Threatening the Benefits from International Portfolio Diversification? Essay
  • Essay about Markowitz-diversification
  • Essay about Efficient Diversification
  • FIN 403 Week 5 Individual Assignment International Portfolio Diversification Paper

Become a StudyMode Member

Sign Up - It's Free