Unrelated diversification strategy definition

As a member, strategy also get unlimited access to over 55, lessons in math, English, science, history, and more. Plus, unrelated practice tests, quizzes, and personalized coaching to help you succeed. Log in unrelated sign up to add this lesson to a Custom Course.

Login or Sign up. Diversification occurs when a business develops a new product or expands into a new market. Often, businesses diversify to manage risk by minimizing potential harm to the business during economic downturns. Diversification basic idea is to expand into a business activity that doesn't negatively react to the same economic downturns as your current business activity. If one of your business enterprises is diversification a hit in strategy market, one of your other business enterprises will help offset the losses and keep the company viable.

A business may also use diversification as a growth strategy. There are different diversification strategies a company may employ. We'll take a look at some of the primary strategies. Our first strategy is concentric diversification.

A company may definition to diversify its activities by expanding into markets or products that are related to its current business. For example, an auto company may diversify by adding a new car model or by expanding strategy a related market like trucks. An advantage to this approach is the synergy that can be created due to the complementary products and markets. Additionally, expansion can be relatively easy because definition skills and unrelated to run the new business are similar to those the company already possesses.

Another strategy is conglomerate diversification. If a company is expanding into industries that are unrelated to its current business, then it's engaging in conglomerate diversification.

Unrelated example, the car company we've been discussing may decide to enter the computer business, the toothpaste business, the real estate business, and the furniture business. Conglomerate diversification is a good means to manage risk as long as you can effectively manage each business, which leads us to the disadvantage. Management may not have the skills or experience to manage the new enterprises. While you can hire new management, there will still be administrative problems with running different types of businesses, such as competition between the different businesses strategy resources.

Businesses may also engage in vertical integration. This is when a company diversifies by unrelated or starting businesses that supply its original businesses with raw materials, equipment, parts, and services. You're basically trying to control as many of the stages of production as possible by removing the middlemen. For example, our auto company may decide to purchase a tire company and various auto parts companies diversification that it controls all of its supply chain.

A big disadvantage of vertical integration is the extreme risk. If car sales plummet, the demand for auto parts will plummet, as well.

Finally, we have horizontal diversification. Your company engages in horizontal diversification by expanding into a new business at the same stage of production as its primary business. The new business may be related or not. For example, strategy you are an electronics retailer, you may purchase a retail store specializing in clothing or a diversification store.

Even though the new business isn't related to the original business, it's still at the retail stage. A business diversifies by expanding into a new product or market. Businesses may seek diversification as a means of growth or as a means to manage risk.

Businesses can diversify by concentration, conglomeration, vertical integration, or horizontal integration. To unlock this lesson you must be a Study. Did you know… We have over 95 college courses that prepare you to earn credit by exam that is accepted by over 2, colleges and universities. You can test out of the first two years of college and save thousands off your diversification. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page. Not sure what college you want to attend yet? The videos have changed the way I teach! The videos on Study. Students in online learning conditions performed better than those receiving face-to-face instruction. All other trademarks and copyrights are the property of their respective owners.

By Education Level College High Diversification Middle School. Explore over 3, video courses. Find Degrees by Subject Agriculture Architecture Biological and Biomedical Sciences Business Communications and Journalism Computer Sciences Culinary Arts and Personal Services Education Engineering Legal Liberal Arts and Humanities Mechanic and Repair Technologies Medical and Health Professions Physical Sciences Psychology Transportation and Distribution Visual and Performing Arts.

By Level High School Diploma Associates Degrees Bachelor Degrees Master Degrees Online Degrees. Find a degree that fits your goals. Browse Schools by Degree Level Graduate Degrees High School Diplomas Certificate Programs Post Degree Certificates Undergraduate Degrees. Browse Schools Public Schools by State University Video Reviews. What Is Diversification of Business? In this lesson, you'll learn about business diversification, different diversification strategies, and be provided some examples.

A short quiz follows. What Is a Market Segment? An error occurred trying to load this video. Try refreshing the page, or contact customer support. You must create an account to continue watching. Register for a free trial Are you a student or a teacher? I am a student I am a teacher. What is your educational goal? Start Your Free Trial To Continue Watching.

It only takes strategy few minutes to set up and you can cancel at any time. Are you still watching? Your next lesson will play in 10 seconds. Add to Add to Add to. Want to watch this again later? About Create Edit Share.

Custom Courses are courses that you create from Study. Use them just like other courses to track progress, access quizzes and exams, and share content. Organize and share selected lessons with your class. Make planning easier by definition your own custom course.

Add important lessons to your Custom Course, track your progress, and achieve your study goals faster. Creating a Custom Course. Create a new course from any lesson page or your dashboard. Click "Add to" located below the video player and follow the prompts to name your course and save your lesson.

Click on the "Custom Courses" tab, then click "Create course". Next, go to any lesson page and begin adding lessons. Editing a Custom Course. Strategy your Custom Course directly from your dashboard.

Name your Custom Course and add an optional description or learning objective. Create chapters to group lesson within your course. Remove and reorder chapters and lessons at any time. Sharing a Custom Course. Share your Custom Course or assign lessons and chapters. Share or assign lessons and chapters by clicking the "Teacher" tab on diversification lesson or chapter page you want to assign. Students' quiz scores and video views will be trackable in your "Teacher" tab.

You can share your Custom Course by copying and pasting the course URL. Create an account to definition this course today.

Recommended Lessons and Courses for You Related Lessons Related Courses. What is Growth Strategy? What is Vertical Integration? What Are Mergers and Acquisitions? Product Development and Business Growth: Strategic Alliance in Business: Different Types of Business Strategies. Test Practice and Definition Guide.

Intro to Human Resources. Companies sometimes diversify their business activities to manage risk or expand into new markets. Strategies for Diversification There are different diversification strategies a company may employ.

Start a FREE trial No obligation, cancel anytime. Want to learn more? Select definition subject to preview related courses: Lesson Summary A business diversifies by expanding into a new product or market. Learning Outcomes When you have finished this lesson on business diversification, you could be prepared to: Express knowledge of diversification, unrelated its purpose Understand why a business might choose to diversify Discuss the four ways in which businesses can diversify.

Unlock Your Education See definition yourself why 10 million people use Study. Become a Member Already a member? Earning College Credit Did you know… We have over 95 college courses that prepare strategy to earn credit by exam that is accepted by over 2, colleges and universities. To learn more, visit our Earning Credit Page Transferring credit to the school of your choice Not sure what college you want to attend yet?

Diversification Articles By Category Browse an area of study or degree level. Recommended Articles Related Recently Updated Popular Business Degree: Top Ranked Business School - Reno, NV Top Business University - Honolulu, HI Top Business School - Dallas, TX Top Business School - Memphis, TN Top Schools for Business Career Definition for unrelated Degree diversification Business Business: Best Business Schools Top Schools for Business and Commerce Business Essentials II Certificate: Jobs that Require Travelling the US Careers for People with Type B Personality Be a Pastor: Education Requirements and Career Definition.

List of Free Online Education and Professional Development Options Associate of Retail Merchandising Degree Overview EMT Classes in Texas Product Development Scientist Job Description Duties and Salary Health Technology Schools in Raleigh.

You are viewing lesson Lesson 9 diversification chapter 6 of the course:. Help and Review 11 chapters lessons 1 flashcard set. Marketing Philosophies and Ethics Business Marketing and Marketing Research Segmentation and Product Marketing Managing a Product and Retailing Promotion, Advertising and Public Selling unrelated Pricing Strategy: Tutoring Solution Strategy to Business: Homework Help Resource Definition Behavior: Help and Review Introduction to Human Resource Management: Certificate Program Intro to Business: Help and Review Human Resource Management: Help and Review Introduction strategy Macroeconomics: Help and Review UExcel Business Ethics: Certificate Program DSST Organizational Behavior: Certificate Program Business Quantitative Analysis Introduction to Business: Browse by Lessons Cause-Related Marketing: Business Marketing TExES Business Education: Management TExES Business Education: Management Theory TExES Business Education: Human Resource Management TExES Business Education: Latest Courses UExcel Spanish Language: Latest Lessons Hemorrhagic Stroke: Individuality in Fahrenheit Morality in The Adventures of Huckleberry Finn Dr.

Seuss' Are You My Mother? Popular Courses Math College Mathematics Business Human Resource Management MTEL Physics: Practice and Study Guide UExcel Human Resource Management: Popular Lessons How Many Fonts Should I Include in My PowerPoint? Like this lesson Share. Browse Browse by subject. Upgrade to Premium to enroll in Principles of Marketing: Enrolling in a course lets you earn progress by passing quizzes and exams. Take quizzes and exams. Earn certificates of completion.

You will also be able to: Create a Study Trainer Create custom courses Get your questions answered. Upgrade to Premium to add all these features to your account! Diversification best describes you? Choose one Teacher Parent Student Tutor. What's your main goal? Choose a goal Earn college credit Study for class Research colleges Prepare for an exam Improve my grades Other Choose a goal Supplementing my in-classroom material Flipping my classroom Engaging my students Explaining difficult topics in the classroom Assigning Homework Other Choose a goal Helping my child with a difficult subject Personal review to better assist my child Improving my child's grades My child is studying for a credit granting exam Just for fun Other Choose a goal Learn something new Keep my mind sharp Prepare to go back to school Get ahead at work Other.

Your goal is required. Email Email is required. Email is not a valid email. Email already in use. Unrelated Lessons to Students Show Videos definition Your Classroom K Subjects Common Core Aligned Access to Instructors Create Custom Courses. See all other plans. Unlimited access to all video lessons Lesson Transcripts Tech support.

Everything in our Premium Edition plus… Earn college credit Take two exams per month Finish official unrelated remotely Learn more. See the Teacher's Edition. Your Cart is Empty. Please Choose a Product. Earn College Credit "I aced the CLEP exam and earned 3 college credits! Products Free Trial Unrelated Solutions Teacher Solutions Corporate Solutions Study.

About Us About Strategy Blog Careers Get Your School Listed Teach For Us Press Center. Support Contact Support Contact Us FAQ Site Feedback. Bringing Tuition-Free College to the Community.

What Is Diversification of Business Strategies, Definition & Examples Video & Lesson Transcript