Some examples of concentric diversification include resource sharing, strategic partnerships and acquisitions concentric diversification, a strategy used to increase company appeal to consumers, can also involve opening new markets by creating product variation.
Concentric diversification occurs when a company expands into an industry related to its current operations definition companies may diversify to spread risk, maximize shareholder value and use up cash on a cash-laden balance sheet. Definition of concentric diversification: a type of diversification in which a company acquires or develops new products or services (closely related to its core business or technology) to enter one or more new markets. Concentric diversification, also referred to as related diversification, is a strategy that companies use to drive shareholder value increases companies pursue a concentric diversification strategy to achieve “synergy” synergy occurs when a company performs better as a whole than as the individual sum of its parts.
Concentric diversification involves adding similar products or services to the existing business for example, when a computer company that primarily produces computers starts manufacturing laptops, it is pursuing a concentric diversification strategy. Diversification may be ‘concentric’ or ‘pure’, the former involving some carry over of production or marketing functions (for example, two firms which utilize a common technological base – razor blades and garden spades both produced from stainless steel and sold through the same outlets – supermarkets), while in the latter case the. One example of concentric diversification is sharing resources or facilities companies do this to achieve economies of scale and reduce costs for example, a metals distributor who needs a larger warehouse may contract with a manufacturing company that has a processing facility with extra space.
Concentric diversification is a type of business strategy where a company acquires or creates new products or services to reach more consumers these new products and services usually are closely related to the company's existing products and services.
Concentric diversification strategy: the introduction of new but related products in the new markets is considered as concentric diversification strategy for example, the at&t company in america is involved in the application of concentric diversification strategy by adding cable lines for fast internet services across the country the. Guidelines for concentric diversification: there are certain conditions that are favorable for the application of concentric diversification strategy for this purpose following are some of the guidelines that specify the effectiveness of the concentric diversification strategy.
Some examples of concentric diversification include resource sharing, strategic partnerships and acquisitions concentric diversification, a strategy used to increase company appeal to consumers, can also involve opening new markets by creating product variation resource and facility sharing is. Concentric diversification this means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage for example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers.