Diversification as a Business Strategy

Paper Summary:

The paper first defines diversification, then identifies the positive and negative aspects of diversification as a business plan. The writer looks into the effects of diversification using examples from international companies and industries. The paper studies what strategic management experts write about diversification and discusses whether or not diversification is a successful business strategy.

From the Paper:

"Whether a business should adopt the strategy of diversification or not is a question which brought about considerable debate among the great management thinkers all over the world. While Ansoff and Howe supported the idea thinkers like Kastens and Porter opposed it. Its true that diversification has a lot of advantages and some disadvantages as well. In this assignment I am going to discuss the problems and advantages of the diversification strategy in some detail. However as Mintzberg said, "that no matter what its basis, every related diversification is also fundamentally an unrelated one. That is no matter what is common between two different businesses, many other things are not."(In Mintezberg & Quinn, 1991:79). Hence I am not analyzing the different types of diversification and its merits and demerits separately; instead I am taking diversification as a whole for this analysis."

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