Diversification Strategies

Topics: Eastman Kodak, Rochester, New York, George Eastman Pages: 4 (1289 words) Published: June 10, 2012
Diversification Strategies

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. Comcast Corporation and Eastman Kodak Company are two companies that made the decision to diversify themselves, but it led to different outcomes.

Comcast Corporation was originally founded in the early 1960s under the name, American Cable Systems, Inc. Initially, the company only served Tupelo, Mississippi. The company was also one of only a few community antenna television (CATV) services in the nation. The “CATV business was predicated on the fact that rural areas were underserved by commercial television stations which catered to large metropolitan areas.” (Comcast Corporation, 1999) The CATVs used huge antennas that pulled in distant signals to display the shows on television. If a household did not have one of those antennas they had little use for television. Community Antenna Television was not free but its users saw it as a beneficial investment. Under new ownership, American Cable Systems, Inc. began to expand into other areas in Mississippi. This expansion was profitable but the business saw more potential and wanted to branch out further.

In 1966, American Cable Systems, Inc. expanded into areas in Philadelphia. It was this expansion that sparked a new movement for the company. The next state the company began...
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