Diversification Strategies

very broad one, meaning that industry competition can be very diverse, and indeed it is. The

Findings and Conclusion: Two types of diversity was analysed in this research- inherent diversity and acquired diversity. Inherent diversity includes traits a human is born with like sexual orientation, gender and ethnicity. Acquired diversity includes traits gained with experience like appreciating cultural differences. The research shows that companies which have 2-D diversity perform better than others by creating an environment of innovation. A growth rate of 45% in market share and 70% in capturing a new market is shown by firms having 2-D diversity.

For example, Oxfam have now tried to gain popularity to give them the opportunity to raise more money. To achieve this, Oxfam have held charity concerts and festivals. This is diversification as it is completely different

Diversification involves taking a new product or service into a new market; this strategy is notably the riskiest as the organisation has to carefully research the market and plan the launch of the product or service. Due to the risk involved, a public sector organisation like the NHS cannot afford to take the associated risk, but the NHS does compete in one whole new market in catering and weight loss. Here the aim of the NHS is to provide weight loss menus, but their USP (unique selling proposition) is associated with health.

* Greater diversity leads to greater innovation and productivity which is crucial in being successful on the market. It encourages different perspectives and ideas whilst fostering innovation as well as ability to come up with wider range of solutions to a business problems and challenges. Available at: http://www.slideshare.net/fred.zimny/forbes-innovation-through-diversity?related=1 (Accessed:13th October 2015)

The corporate strategy of the business diversification is to create a synergy to achieve more performance under a single umbrella rather than diverse business units (SNU, 2016). A business diversification is to build the company shareholder value when the independent business units can perform under a single corporation as an umbrella organization instead of independent parents or a corporation. A diversified organization has many business units and each business units have its own business level strategy irrespective of whether they are related or not. A successful business diversification not only spreads the business risk across the diverse units but also adds a long term economic value to the company. The strategy for starting a new business is based on industry attractiveness test, the cost of entry and the better off test (Thompson, Peteraf, Gamble, and Strickland, 2016).

To develop such strategy mix of strategic options will be applied including Integration to deal with competition and Intensive + Diversification strategies for product and market development.

As technology continue to refine how products and services are delivered to consumers, competition among industry participants becomes more refined. Organizations that are able to keep up with changing technologies become leaders while those that are not fall behind. Mergers and acquisitions are increasing while causing small businesses to sell out or seek partnerships and cooperatives in order to remain competitive and relevant.

Corporate-level strategies are liable for market definition; they address the entire scope of the business. This strategy helps a business to diversify its service. It gives them direction in which geographic region they should operate and which service markets to strive in. “Thus, an effective corporate-level strategy creates, across all of a firm’s businesses, aggregate returns that exceed what those

Nevertheless, the vertical value chain created by Aldi benefits the company’s corporate strategy. To be a local supplier,

The company may face structural problems associated with the diversification strategy. As the company gets larger and larger and diversify into different product divisions, the organization structure should be changed to fit the diversification strategy. An inappropriate fit may result in low performance and lead to strategic changes.

3M heavily based its business on innovation and while doing this it always supported its employees in terms of being innovative. 3M also always followed the alternative ways in order to increase their profit and market share, and they found that one of the best ways is through organizational innovation. Therefore, in order to improve their business 3M developed 6 different strategies over its history. These strategies helped 3M to promote entrepreneurship and increase customer satisfaction within the market.

The company must clearly envision diversity as essential to business strategy because of the competitive advantages that follow.

3M Corporation has small laboratory or research and development section with some technicians and doing experiments on sandpaper and developed some core technology at that time for 3M like masking tapes. After such core technologies development 3M achieved global reputation and become “hothouse” of innovation. However the process grows slowly and allows 3M to recognize user needs because 3M researchers contact different employees in factories.

The company 3M is a diverse company that was incorporated on June 25, 1929 with presence in more than 10 industries alone. “3M products are sold through a number of distribution channels, including directly to users and through wholesalers, retailers, jobbers, distributors and dealers in a range of trades in a number of countries worldwide” ("3M Co," n.d., para. 1) The company head quarters is located in St. Paul Minnesota, however 3M has locations all over the United States. 3M is best known within the consumer industry with brands such as Post-it, Scotch, Scotch-Brite, Filtrete, O-Cel-O, Nexcare, and Command. “3M is one of 30 companies in the Dow Jones Industrial Average and also is a component of the Standard & Poor's 500