APT Initiatives
APT Business & Economics Resources
Minimising Workloads, Maximising Performance
Established in 1999

Categories
Information
Special Items

Diversification

Diversification in the strictest sense of the word, involves selling new products or services in new markets. It is one of the four strategies of Ansoff’s matrix – a well known model to use when making strategic decisions about marketing, and specifically over strategies for achieving growth in a national and an international context. However, the term is often used when selling to new markets (which may or may not involve the selling of completely new products or services). Where it does involve selling new products / services to new markets it is considered to be the most risky strategy as the firm is dealing with two unknowns – the firm lacks experience both with the product and with the market in which it intends to sell. It usually requires considerable research and significant investment. It is often adopted when a business faces saturation, or intense competition, or declining sales in its current market, as a result of other factors, eg recession. Conversely, however, diversification can actually help to spread risk – as the business becomes less vulnerable to changes in one particular market. It is often adopted when a business faces saturation, or intense competition, or declining sales in its current market as a result of other factors, eg recession. In practice, it is difficult to think of examples of pure Ansoff style diversification – in most cases businesses tend to move into market areas where there is some connection with their present activity. For this reason it is useful to distinguish between related and unrelated diversification. See related and unrelated diversification.

Millstone Lodge, Eaton Upon Tern, Market Drayton, Shropshire, TF9 2BX - Tel : 01952 540877 - Fax : 01952 541230
Registered in England no.: 5211217 VAT Number: 815750626
www.apt-initiatives.com - sales@apt-initiatives.com | © Copyright 2008 - APT Initiatives Ltd

terms & conditions | sitemap

Valid HTML 4.01 Transitional Valid CSS!