Swot Analysis : Asda Supermarket

“The Benefits of diversification are clear. Portfolio theory has played a crucial role in explaining the relationship between risk and return where more than one investment is held. It also enables us to identify optimal and efficient portfolios.”

“In investing what is comfortable is rarely profitable,” Robert Arnott, famous entrepreneur. Robert Arnott meant that you have to step out of your comfort zone and diversify our portfolio to succeed in the stock market, in other words diversification. Diversification is one of the most important strategies to use in the stock exchange, and since diversification is one of the key concepts you need to understand and utilize in today's stock exchange, you will need to learn why you use it, how I used it, and the disadvantages and the advantages of diversification.

Analyst, investors, and managers use complied information from several financial statements to compare the relative weaknesses and strengths of organizations. The use of ratios assist in linking the balance sheet, cash flow statement, and income statement to perform quantitative analysis. The ratios used by an organization differ dependent on the type of products or services offered. Choosing the correct ratio is essential in planning because certain ratios will assist in achieving the organization’s mission while others have no validity(1). Goals of an organization require effective financial management and effective planning. Ratios are tools used by organizations to discover trends and provide indicators that will measure

Definition: Diversification refers to a strategic direction that takes companies into other productsand/or markets by means of either internal or external development.

Over a long time horizon researchers have contradictory views about investment in portfolio, are “Put all your eggs in one basket” and “Don’t put all your eggs in one basket”. The latter one is supported by many and known as diversification [7]. Diversification is associated with reducing risk and maximizing returns of investors and portfolio managers i.e. risk-return trade off. An investor gets benefitted by spreading his scarce resources over various assets [2, 8] which maximizes return and minimizes risk.

* An analysis of the UK population shows that there are more retired people than children representing the Baby Boom generation (Herald Scotland, 2010).  The ageing population is discouraging for the food retailers older people tend to eat less .  They are less likely to travel to supermarkets to shop compared with the younger generation.  Although internet literacy level drops over the age of 65 years within the population (Turban et al., 2001), it has nevertheless been predicted that the ageing population would find online shopping more convenient.  However, small deliveries are considered to be ineffective and expensive.

Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.

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, yield higher returns and pose a lower risk than any individual investment found within the portfolio (Silvia M.Chan-Olmsted, 2007). Firms that have success strive to transfer their winning business know- how to new activities. To these firms,

The principle of diversification can substantially reduce the variance of returns because the low returns in one industry is offset by high returns and positive growth in another, so we have decided to make investments in

Diversification of an investment is essential and highly beneficial for a number of reasons. It is used to reduce risk and increase returns by diversifying investments into a number of different areas. Through diversification the effects of business risk or unsystematic risk are dispersed causing investment fluctuations to counterbalance one another reducing risk (Investopedia, 2003). Since the future is unpredictable, investors have no way of knowing with certainty which investments classes will perform the best. By diversifying assets that are uncorrelated with one another an investor can reduce risk and create an investment mix that will provide an increased advantage for high returns.

HowRu a card business and its subsidiary has a 14% share in the greeting card business. Everyone knows the best time is holiday season in this industry. So this company needs to diversify its portfolio in order to generate income to make up for the slow times. How can this company diversify and what ways can they find funds to allocate to new Investments.

Diversification, as a risk management means, mainly concerns the alteration and experimentation of various kinds of investments that are included in a specified portfolio. The reason why it is the usual practice is because a certain portfolio is mostly inclusive of different investments that can bring about higher profits as a relatively lower risk of stand-alone investments within the similar or

Diversification is worth more than a word. It works on reducing the total risk of a portfolio with different asset types. But what contributes to the success of portfolio diversification? A large size of portfolio? A variety types of asset allocation? Adding international investment? Numerous of risk factors? They are all indicators of a well-diversified portfolio. But it is hard to achieve a perfectly diversified portfolio in reality because you cannot diversify all types of risk. Following, we will discuss about the advantages and disadvantages of diversification in portfolio management under circumstances. On one hand, some mention that dynamic and numerous asset allocations in the portfolio will reduce idiosyncratic risk and some level of market risk. While some also suggest benefit exists of introducing multi-factor pricing models to cover different risk factors. On the other hand, arguments arise demonstrating adding international investment may disappoint investors because foreign markets could be correlated and moved together in a global world. Another disadvantage further defined will be the correlated asset allocations weaken the effect of diversification. At the end, conclusion will be drawn to support the useness of diversification.

Every finance students have learnt diversification is to reduce total risk by investing a basket of assets in portfolios. But what contributes to the success of portfolio diversification? A large number of assets? A variety types of asset allocation? Adding international investment? Numerous of risk factors? They are all indicators of a well-diversified portfolio. In this case, we will discuss about the advantages and disadvantages of diversification in portfolio management with related indicators. On one hand, some mention dynamic and numerous assets allocation in the portfolio will reduce both risks. While some also state the benefit of introduce multi-factor portfolio pricing models. On the other hand, arguments arise demonstrating adding international investment may disappoint investors because foreign market could be correlated and moved together. Another disadvantage could be the correlated assets collected weaken the effect of diversification. At the end, a balanced conclusion will be drawn to support the useful diversification.

Traditional portfolio construction approaches, which focus on asset class diversification, may fall short of investors’ goals. A more efficient diversification strategy may be to allocate across the underlying “risk factors.”