Diversification Strategies

Better Essays
Diversification Strategies
Bus508
09/15/2010

1. Compare and contrast the two businesses-core business, their size, financials, global presence, use of e business (marketing, sales etc)
The first business I examined was NetFlix. Netflix is in the midst of a company downturn and must make drastic changes to turn the company back around. Recently the company decided to increase the cost of their monthly services from $10 to $16. This over time caused a decline of 805,000 customers domestically. The company’s stock has decreased from $305 a share July 13 to a now $80 with investor belief in the company’s growth shattered. With a rise in content acquisition costs and steep global expansion costs the company is facing a challenging time. Although profit is growing in Canada and Latin America it is early in the venture and growth is slow. The company decided to introduce the product to the UK and Ireland soon after and company losses doubled to a staggering $23 million.
After a couple rough years coffee giant, Starbucks is back with profits on the increase. After suffering losses the company decided to revamp. They began to highlight access to Wi-Fi, localized shops and employee training. These changes helped because profit began to pick up again encouraging the company to go international.
They have begun their global expansion beginning with China. Not only did the product sell in China but the company will also grow the company’s coffee bean. After a successful transition to China they have now recently began expanding to India. Starbucks signed a non-binding agreement with the country’s biggest trade coffee grower, Tata Coffe Ltd. In preparation for their international push the company has designed a wordless logo. The new logo is meant to incorporate all cultures by representing the company using only a logo, such as Nike does. This month the company plans to open another 400 channels of business outside the United States. 1. Compare and contrast



References: Kurtz, D. (2010 Update). Contemporary Business: 2011 custom edition (13th ed.). Hobeken, NJ: John Wiley & Sons. http://paidcontent.org/article/419-netflix-puts-global-expansion-on-hold-as-costs-drag-it-down/P0/ http://www.fastcodesign.com/1662986/with-eyes-on-world-expansion-starbucks-drops-its-name-from-new-logo http://www.forbes.com/sites/greatspeculations/2011/10/28/netflix-priced-for-failure-stock-should-be-142/

You May Also Find These Documents Helpful

  • Best Essays

    Diversification Strategy

    • 2855 Words
    • 9 Pages

    STRATEGY & TRANSFORMATION FINAL ESSAY Topic: When A Company Likely To Choose Related Diversification and When Is It Likely To Choose Unrelated Diversification? Introduction First of all, “corporate strategy is what makes the corporate whole add up to more than the sum of its business unit parts” (Porter, M. E., 1987 cited in Mintzberg et al 2003, p.451). In this regard, corporate-level strategy is concerned with two related issues; “first one is what businesses a corporation should compete…

    • 2855 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    Diversification Strategies

    • 1901 Words
    • 8 Pages

    Diversification IBM a Fortune 500 company celebrated its 100th birthday this past June. IBM employs over 400,000 employees and is considered to be a $100 billion dollar or more giant in e-business global marketing technology. With the inception of the computer, IBM’s core business was mainframe computers, which almost bought the company to its knees in bankruptcy. IBM looked at the PC as just a gadget and with any gadget over time would fade into oblivion. IBM would find out the hard way…

    • 1901 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Diversification Strategies

    • 1298 Words
    • 6 Pages

    Diversification Strategies BUS 508 Contemporary Business Seena S. Nelms Strayer University Diversification Strategies What is diversification? According to the Merriam-Webster Dictionary online, diversifications means to produce variety or to engage in varied operations. Diversification is a strategy that takes companies into new markets with new products and services to increase their profitability. Some corporations have diversified and succeeded, while other have…

    • 1298 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Diversification Strategies

    • 1378 Words
    • 6 Pages

    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…

    • 1378 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Diversification Strategy

    • 1125 Words
    • 5 Pages

    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…

    • 1125 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    Diversification Strategies

    • 2097 Words
    • 9 Pages

    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…

    • 2097 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    Diversification Strategies

    • 1526 Words
    • 7 Pages

    Diversification strategies are strategies used by companies to try to increase profitability through greater sales volumes obtained by new products and/or services. Amazon.com has diversified quite a bit since its conception in 1995. Starting out as an online bookstore, and evolving into a one stop e-shopping hub where millions of people shop for a variety of different items over the internet. Amazon.com today is one of the largest online retailers in the world. However, when companies try diversification…

    • 1526 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Diversification Strategies

    • 1584 Words
    • 7 Pages

    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…

    • 1584 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Diversification Strategy

    • 1823 Words
    • 8 Pages

    Jump to: navigation, search Videocon Industries Ltd. Videocon Logo.svg Type Public Traded as BSE: 532129 NSE: VIDEOIND Industry Conglomerate Founded 1979 Founder(s) Venugopal Dhoot [1] Headquarters Gurgaon, India Key people Venugopal Dhoot ( Chairman & Managing Director) [1] Products Consumer Electronics Home Appliances Components Office Automation Mobile phones Wireless Internet Petroleum Satellite television Power Revenue DecreaseINR 127.565 billion (US$2.32 billion)(2011)[1]…

    • 1823 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Diversification Strategies

    • 1250 Words
    • 5 Pages

    Diversification Strategies YourFirstName YourLastName University title Introduction When Kelleher Herb and King Rollin founded Southwest Airlines in 1971, they wanted to offer airline services which were low-cost, in busy markets of not more than 500 miles. The first flights were between Houston, Dallas and San Antonio. Today Southwest is one of the largest airlines in United States for its local passenger miles flown. Southwest has executed business models in an effective manner…

    • 1250 Words
    • 5 Pages
    Powerful Essays