Diversified companies can be grouped into the following categories:
Organizations that have a core business area, but at the same time have several divisions from other industries.
Firms with narrow diversification, having 3-5 business areas that are closely related to each other.
Companies with purchase shareholder databasewide diversification, uniting a large number of corporations with related activities.
Multi-industry enterprises with diversification across several unrelated divisions.
Among the main tasks of the management apparatus of a diversified firm, the following can be highlighted:
management of the overall investment portfolio and distribution of resources across all business areas;
developing strategies for all divisions and coordinating them with the general policy of the company;
organization of interaction between all economic sectors;
control over the functioning of all business areas of the enterprise.
For a non-diversified firm, the strategies used in its work may differ depending on the market situation and external factors.
Characteristics of diversified companies
In cases of low competitiveness and high rates of market expansion, the following strategies are used:
partial abandonment of the tactics of maximum presence in the industry;
acquisition of competing companies;
related diversification;
reorganization of a company through a merger with a larger, more well-known corporation.
Given the high competitiveness and high growth rates of the industry, the following strategies are advisable:
increasing the degree of presence in the industry;
entering foreign markets;
related diversification.
In case of low competitiveness and slow market expansion rates, the following strategies are most relevant:
merger with a larger company;
sale of the company's assets to a more well-known corporation in the industry;
moving away from the strategy of being present in only one market.
In conditions of high competitiveness and low rates of market growth, the following strategies are used:
expansion into international markets;
organization of joint ventures and penetration into related markets;
vertical integration;
increasing the depth of the company's presence in the market.