BOYAN JOVANOVIC New YorkUniversity The Diversification of Production produce more than one product. In this sense their production is diversified‚ or horizontally integrated. This paper addresses two questions. First‚ why have firms become more diversified over the past century? And second‚ why are diversified firms more oriented toward research and development (R&D) than nondiversified firms? I tackle these two questions under the assumption that a firm diversifies to maximize its efficiency
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TYPES OF CORPORATE DIVERSIFICATION When a firm chooses to diversify‚ it faces a decision as to how related the new business(es) is(are) to the existing businesses of the firm. When Charles Bluhdorn was CEO of a company called Gulf+Western in the 1950s‚ he diversified into a host of industries: motion pictures (Paramount Pictures‚ the makers of The Godfather‚ Chinatown‚ and other movies)‚ clothing‚ cigars‚ zinc mines‚ auto parts‚ and sugar‚ among others! In contrast‚ a company such as Cooper
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Unrelated Diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. For example‚ if the shoe producer enters the business of clothing manufacturing. In this case there is no direct connection with the company´s existing business - this The unrelated diversification is based on the concept that any new business or company‚ which can be acquired under favorable financial conditions and has the potential for high revenues‚ is suitable
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Abstract Diversification is a form of corporate strategy to increase profitability of a company through greater sales volume obtained from new products and new markets. Diversification strategies are used to expand firms’ operations by adding markets‚ products‚ services‚ or stages of production to the existing business. I will be discussing diversification strategies of Johnson & Johnson who have benefited from diversification and National Semiconductors Company which was not able to succeed
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world’s largest food company based in Vevey‚ Switzerland. Headquartered in Northfield‚ United States‚ Kraft is the world’s second largest food company. In 2009‚ Nestlé has 280‚000 employees while Kraft has 97‚000. They challenge each other in global dominance in 3 sectors: beverages‚ convenient meals‚ snacks. Nestlé has a “Good Food‚ Good Life” ambition‚ which emphasizes nutrition‚ health and wellness. Kraft responds to Nestlé globally by “making today delicious”. Nestlé’s initial motivation for globalization
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Diversification Strategies Diversification is a risk that companies have to take in order to stay competitive in it’s changing market. Some companies have been successful diversifying their business‚ and in opposition there are other companies that in the process of expanding their business have not succeeded. For the purpose of this report‚ I will use the “Sara Lee Corporation” as a successful company throughout its diversification strategies. On the other hand‚ I would use Ebay as an example
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Market Diversification Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97‚Bangladesh was the 7th and 5th largest apparel exporter to the USA and European Unionrespectively. The industry was successful in exploring the opportunities in markets awayfrom EU and US. In FY07‚ a successful turnaround was observed in exports to thirdcountries‚ which having a negative growth in FY06 rose three-fold in FY07‚ whichhelped to record 23.1 percent overall export growth in the RMG sector
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from Kraft Foods itself‚ give two examples of other organisations that are likely to be involved in their Supply Chain (bringing goods to the final consumer). Kraft foods supply chain will include a company that does cheap but quality milk which will create Kraft’s products also the second supply chain will be a company that supply a large amount of salt which is also need for the products that Kraft creates. Packaging is also an essential for the Kraft’s company. 2. Why do you think Kraft Foods
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Discuss: “The concept of efficient diversification implies that for an investor wishing to efficiently assume risk in their portfolio; the risky part of the portfolio should consist of weighted proportions of all possible risky assets.” Abstract: Minimizing investor’s portfolio risk was a dominant goal influencing decision making of investment. The effective method of reducing risks was to efficient diversifying the portfolio. The author’s purpose in this article was to share thoughts and concerns
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Diversification Strategies Let’s explain diversification of a company first; I myself thought it meant something totally different. A diversified company is a company that has multiple unrelated businesses. Those different businesses require separate management teams‚ have different customers‚ and produce different products or sell different services. One of the advantages of being a diversified company is that can create a separation from issues of one of the other businesses. Companies can
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