This research paper analyses corporate diversification strategies and challenges in strategy implementation. When businesses grow, they face difficulty in increasing market shares, which is profit. Therefore, corporate diversification is necessary at this point. Diversification is introducing the business into new areas and opportunities. For example, if it is a grocery store in one town, the business considers creating branches in two or more towns. Through this, the company realizes the benefits of diversification. There are two corporate diversification strategies. One is a related strategy that relates to expanding business in the existing market. This allows businesses to use existing brand and customer base. The other one is the unrelated strategy of entering a completely new market.
corporate diversification strategies and challenges in strategy implementation
THE BENEFITS OF DIVERSIFICATION IN BUSINESS MANAGEMENT
This section examines the benefits of diversification. Diversification is a very crucial aspect of investment of capital. Investors need to ensure that capital is evenly spread over different activities. Implementation of the most appropriate corporate diversification strategy is equally vital. These are some of the major benefits. One, minimizing the risk of loss due to multiple sources of return on investment. Therefore, if one source fails, the others still generate income. Secondly, achieving capital preservation is another benefit. Diversification aids investors that are not in their capital accumulation phase to protect their savings. Moreover, diversification ensures multiple income generation in a short period. There are different challenges in strategy implementation.
benefits of diversification in business management
CORPORATE DIVERSIFICATION STRATEGIES AND MAJOR CHALLENGES IN THE STRATEGY IMPLEMENTATION PROCESS
Strategy implementation requires a lot of planning to achieve success. Strategic changes, in most cases, results in increased productivity if the exemplary implementation is undertaken. There are various challenges in strategy implementation. One, weak strategy hence unclear timeliness and undefined roles of employees, leads to a ruckus. Secondly, ineffective training of training leads to poor implementation of strategies. For example, the success of corporate diversification strategies depends on the training level of employees. Thirdly, inadequate resources slow down the implementation process; as a result losing money. Moreover, unclear communication is another challenge. This is because it is a key element; its transparency and honesty are vital. Therefore, companies only realize the benefits of diversification once addressing of challenges is complete.
major challenges in the strategy implementation process
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