Diversification Strategies

Powerful Essays
Topics:
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 strategies they are not always as successful. Time Warner, one of the largest media companies in the world tried to diversify their business by stepping into unknown territory in 2000. When Time Warner purchased AOL at the peak of the dotcom bubble era, they had no idea that they were going to lose billions of dollars due to the acquisition. In 1994, Jeff Bezos founded Amazon.com, and in 1995 the website went online. Before Amazon.com was founded, Jeff Bezos was paying very close attention to the rapid rise of the World Wide Web, stating in 1994 that it was growing at an annual rate of 2,300 percent. When Bezos decided to create an internet based company, he began doing his research by creating a list of the top 20 mail-order companies, and realized there were no book mail-order companies. Bezos parents supported his new business idea, and invested $300,000 they had saved for retirement to help get their sons company started. When Amazon.com went online in 1995, the company simply started as an online bookstore. While some of the largest brick-and-mortar book stores across the United States could offer its customers thousands of books, Amazon.com could offer its customers much more through its website (References for Business). After operations began successfully in Jeff Bezos garage, Amazon.com became such a popular website on the World Wide Web, it moved to its first warehouse in Seattle. At first, Amazon.com only carried about 2,000 different


References: Arango, T. (2010). How the aol-time warner merger went so wrong. Retrieved from http://www.nytimes.com/2010/01/11/business/media/11merger.html?pagewanted=all Funding Universe. Amazon.com, inc. . Retrieved from http://www.fundinguniverse.com/company-histories/Amazoncom-Inc-Company-History.html Johnson, T. (2000). That’s aol folks…. Retrieved from http://money.cnn.com/2000/01/10/deals/aol_warner/ Kramer, L. (2009). Why the AOL-Time Warner Merger Was a Good Idea. Retrieved from http://www.thedailybeast.com/articles/2009/05/04/how-time-warner-blew-it.html Levy, A. (2011). Facebook’s value tops amazon.com; trails only google on web. Retrieved from http://www.businessweek.com/news/2011-01-28/facebook-s-value-tops-amazon-com-trails-only-google-on-web.html Lopes, J. (2011). The pros and cons of amazon’s growth and diversification. Retrieved from http://jananomba.blogspot.com/2011/06/pros-and-cons-of-amazons-growth-and.html Reference for Business. (Encyclopedia of Business, 2nd ed.). Jeff Bezos 1964— biography. Retrieved from http://www.referenceforbusiness.com/biography/A-E/Bezos-Jeff-1964.html

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
  • Better Essays

    Diversification Strategies

    • 1116 Words
    • 5 Pages

    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…

    • 1116 Words
    • 5 Pages
    Better 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

    • 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