Preview

Diversification Strategies

Powerful Essays
Open Document
Open Document
1584 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Diversification Strategies
BUS 508 | Diversification Strategies | Dr. Marilyn Caroll | | Kayla Lewis | 5/6/2012 |

Diversification Strategies

In today’s global markets companies are faced with tough decisions, one of the toughest decisions a corporation faces is whether or not they should diversify their business. Diversification simply means to mix a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio (Silvia M.Chan-Olmsted, 2007). Firms that have success strive to transfer their winning business know- how to new activities. To these firms, diversification means looking at new industries as exciting opportunities. The decision to diversify or not is one that is made on the highest level and is initiated as a corporate strategy. Moving forward with diversifying can mean a company becoming lost and ridden with debt. Some corporations such as General Electric (GE) have experienced success while others such as Time Warner have experienced less success. This paper will compare and contrast Time Warner and GE in terms of size, global presence, financials and whether or not their diversification strategy was successful or unsuccessful.
To begin, the Warner Brothers established what is known today, after many mergers and acquisitions as Time Warner; the company history can be tracked back to 1922. Today the company is the world’s third largest media conglomerate and is publicly traded on the NY stock exchange. It’s headquartered in New York City and its portfolio includes interactive services, cable systems, filmed entertainment, television networks and publishing. The company is classified as being in the diversified entertainment industry; an industry that’s performance is dependent upon the health of the economy, is highly competitive and very volatile. The company



References: Arthur Anderson, J. D. (2007, March 15). Time Warner; The Strategic Plan Report. Retrieved from Drexel.edu: http://www.drexel.edu Barron, Z. D. (2011, March 06). General Electric: Deep Analysis of Company Strategy. Retrieved from Wall Street Cheat Sheet: http://www.wallstreetcheatsheet.com David Allen, A. G. (2007, December 20). Diversification Strategy. Retrieved from Open Multimedia: http://www.openmedia.ie.edu Silvia M.Chan-Olmsted, B.-H. C. (2007, June 04). Diversification Strategies of Media Conglomerates: Examining its Patterns and Determinants. Retrieved from journal of Media Economics: http://www.asc.upenn.edu

You May Also Find These Documents Helpful

  • Powerful Essays

    Combat Sports in the U.S., particularly Mixed Martial Arts (MMA) is the fastest growing sport. With the interest in the sports growing more gyms that cater to the mixed martial artist are opening. Those athletes that wish to compete seek out organizations they wish to compete for. This results in more events being put on by promoters. There is more business minded people investing in becoming promoters. As this growth continues it means more opportunity and work for sanctioning bodies. The CSA can take advantage of this growth in the MMA by conducting a competitive analysis to determine its place in the market. The competitive analysis was classified as strength for CSA because it beat the competition in all but one category. This gives CSA a strong competitive position in the sanctioning body…

    • 1578 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Know the top five media conglomerates so you can identify those mentioned as a “truly multi-media corporation” in Chapter 11?…

    • 793 Words
    • 4 Pages
    Good Essays
  • Best Essays

    COMCAST v3

    • 2318 Words
    • 8 Pages

    Comcast Corporation was established in 1963 on the joint purchase of American Cable Systems (Associated Press, 2011). With a small starting base of US$ 3 million in revenue during the 1970s, Comcast rapidly expanded to become the world’s largest media company and the leading revenue generator in terms of content broadcasting and cable sectors (Fabrikant, 1990). Comcast is also one of the largest internet and television services providers in the U.S. Headquartered in Philadelphia, Pennsylvania, the company’s key revenue channels include the followings: featured movies, TV programs and series, theatrical exhibition, cable TV channels (E-Entertainment, Golf Channel, NBCSN) and broadcasting, OTA national broadcasting channels (NBC, Telemundo), digital distribution, internet services provider, film production (Universal Pictures), and themed parks and resorts under the Universal brand name (Norman, 2012). Comcast’s 2013 revenue and net…

    • 2318 Words
    • 8 Pages
    Best Essays
  • Powerful Essays

    Novartis, a large multinational pharmaceutical company, recently diversified by buying Alcon, in a £24.8bn deal. Alcon is a producer of eye care products such as contact lenses. Google has diversified by investing £124m in a wind power business. To what extent is diversification the best strategy to achieve profitable growth? Justify your answer with reference to Novartis, Google and/ or other organisations that you know. (40 marks)…

    • 1220 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    This memo is aimed to evaluate the overall television industry today and to provide a brief overview of one of the industry leading players - Comcast Corporation’s current business situation, specifically, to examine its internal strengths and weaknesses as well as opportunities and threats in the external environment. More importantly, the key challenges that the company is currently facing and the potential solutions to theses problem will be discussed.…

    • 481 Words
    • 2 Pages
    Good Essays
  • Better Essays

    The Comcast Corporation, an internationally known mass media and communications company, transitioned into 2013 looking forward to another healthy year of business. The company in which was founded by Ralph Roberts in 1963 was coming off a 2012 year in which 4th Quarter Consolidated Revenue increased 12% (Comcast, 2013). As the early stages of 2013 advanced, the company continued its growth by showing a 2.9% bump in Consolidated Revenue in the first quarter, followed by a 7% gain in the second quarter (Comcast, 2013). In all, the company was set to move forward with a successful second half of the year.…

    • 1460 Words
    • 6 Pages
    Better Essays
  • Good Essays

    Comcast is the largest cable television company and largest internet service provider by a large margin. They pull in almost 75 billion dollars in revenue annually, serve over 22 million customers, yet have still managed to win the world’s worst company twice in a row. There is no denying Comcast’s ability to make money and pull in customers but with a closer look on their internal strengths and weaknesses along with the external movement of the market environment, we can see what Comcast can do to maintain their competitive edge, and how to combat their weaknesses and threats.…

    • 1112 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.…

    • 1983 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Netflix Case Study Analysis

    • 7539 Words
    • 31 Pages

    Contents [hide] * 1 History * 2 Services * 2.1 Internet video streaming * 2.1.1 History * 2.2 Disc rental * 2.2.1 Qwikster * 2.3 Original programming * 2.4 Profiles * 3 Device support * 3.1 Hardware supported * 3.2 Software support * 3.3 Video game consoles * 3.4 Set-top boxes * 3.5 Blu-ray Disc players * 3.6 Televisions * 3.7 Handheld devices * 4 Sales and marketing * 4.1 Expansion * 4.2 Competitors * 4.2.1 Time Warner * 5 Finance and revenue * 5.1 2010 * 5.2 2011 * 6 Legal issues and controversies * 6.1 Recommendation Algorithm * 6.2 Throttling * 6.3 Releasing This Week * 6.4 Dynamic queue, subscription & delivery methods * 6.5 Removal of Friends feature * 6.6 Linux support * 6.7 Partnerships * 6.7.1 Starz * 6.7.2 DreamWorks * 6.8 The CW * 6.9 Closed captioning * 7 Technical details * 7.1 Streaming * 7.2 "Throttling" * 7.3 Netflix API * 7.4 IT infrastructure * 8 See also * 9 References * 10 External links…

    • 7539 Words
    • 31 Pages
    Powerful Essays
  • Better Essays

    Time Warner is an American media corporation which is the merger between Time Inc. and Warner Communications (1990); subsequently purchased by AOL (2001). Today, it is the largest media institution in the world. It had revenues of 43.7 billion USD in 2005. From figure 1, Time Warner is divided into many business segments in which the major businesses are film productions, television divisions, publishing, telecommunications and Internet. The media products include films, TV programmes, newspapers, magazines and movie discs etc.…

    • 1491 Words
    • 6 Pages
    Better Essays
  • Better Essays

    When companies begin they develop a business plan that details what they intend to specialize in. For some, once they have reached a goal in one market they make decisions to venture out into other markets. In the world of business, that venturing out is called diversifying the company. According to Merriam-Webster’s online dictionary, to diversify is “to increase the variety of the products of; or to engage in varied operations.” (Merriam-Webster, 2012) In a business, when you produce a variety of goods or invest in different markets it is a strategy that provides a back-up in the event that one good or investment goes south. Diversification strategies can be either beneficial or harmful to a company.…

    • 1236 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    the power to cross-subsidise one business from the profits of the others. On the one hand, the…

    • 16059 Words
    • 65 Pages
    Powerful Essays
  • Powerful Essays

    MRC CASE

    • 3042 Words
    • 15 Pages

    Archibald Brinton, President of MRC, Inc., begun an active program of diversification by acquisition. The need for rapid diversification seemed compelling to minimize the risk and to explore new business opportunities.…

    • 3042 Words
    • 15 Pages
    Powerful Essays
  • Satisfactory Essays

    India (Tata Group)

    • 532 Words
    • 2 Pages

    In North America and Europe from 1950 - 1980 corporation focused on building business “empires” by large diversification. There was a tremendous expansion into many different product markets as a source of corporate growth for the newly formed conglomerate companies. The conglomerate fad quickly shifted during the 1980s into 2009 as corporate diversification methods reversed and instead turned into refocusing methods. Conglomerate firms have all but disappeared in North America and Europe as they fell prey corporate raiders looking to acquire them and either restructure them or sell off the pieces for a sizable profit over the purchased price, many times because the stock market valued the conglomerate companies at less than the sum of their pieces. For managers of such diversified companies, the immense amount of uncertainly and risk of corporate raiders created high incentives to quickly restructure before leverage buyouts specialist did it for them.…

    • 532 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Imasco Ltd

    • 1223 Words
    • 5 Pages

    7. Route to Diversification Company To build a broadly based corporation that would rely less on the…

    • 1223 Words
    • 5 Pages
    Powerful Essays