Question

Discuss how firms can benefit from (1) related diversification and also can benefit from (2) unrelated diversification. Discuss some of the key concepts that can explain firm success or firm failure from selecting one or the other diversification strategy.Discuss how firms can benefit from (1) related diversification and also can benefit from (2) unrelated diversification. Discuss some of the key concepts that can explain firm success or firm failure from selecting one or the other diversification strategy.

Answer 1

Answer:

Benefits from related & unrelated diversification.

Explanation:

Firms' benefit(s) from related diversification :

• Building & developing market power - By sharing the  related diversification going on in entire industry.
• Sharing activities & market linkages with other businesses - Associated diversification implies forward & backward linkages.

Firms' benefit(s) from unrelated diversification :

• Leveraging & enhancing different core competencies, USP - By Focusing on self paced unique diversification
• Creating a different ostentation brand - Creating a strong brand, capable of becoming a market leader, rather than market follower

Key concepts explaining firm success or failure from either diversification are implicit within above explanation.