Review the approaches for diversifying the business lineup

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Review the approaches for diversifying the business lineup and whether they pass the three tests of corporate advantage.

Pick a company and name the company as you write about it, which type of diversification would you choose and why (related or unrelated)?
Which business approach of diversifying would you choose (acquisition, internal startup, or joint ventures with other companies), and why?

Sample Solution

Firms using diversification strategies enter entirely new industries. While vertical integration involves a firm moving into a new part of a value chain that it is already within, diversification requires moving into an entirely new value chain. Many firms accomplish this through a merger or an acquisition, while others expand into new industries without the involvement of another firm. A proposed diversification move should pass three tests or it should be rejected (Porter, 1987): (1) how attractive is the industry that a firm is considering? (2) How much will it cost to enter the industry? (3) Will the new unit and the firm be better off? There are different diversification strategies a company may employ: concentric diversification; conglomerate diversification; and horizontal diversification.

It is common belief that you need to hire new employees to grow your business / organization, but this is not the case. In fact, it is more convenient and useful to properly train existing employees, and HR software can help you with that. Talent management platforms facilitate employee development from training courses to performance evaluation. Periodic evaluations can increase employee morale and encourage them to maintain high standards of performance: the software stores data on the issues being discussed, the feedback provided, and the goals / objectives they have decided on. Your employees can also access this information at any time, which will increase commitment to their work and the company. With this data, you can plan the professional development of your employees and assign them short-term and long-term goals.

5. Safe Document Management

HR software keeps all your data in one centralized secure location and ensure that it is available at all times. It is more secure because you can control who accesses the data. In addition, cloud-based talent management solutions ensure that your data is protected and accessible even when there are physical emergencies, such as office fires. All you need to access the data is a mobile device that has Internet or a computer. Talent management platforms also provide document management capabilities – you can learn which staff member reads what and when. Plus, you can improve productivity by reducing time-consuming paperwork, accessing old documents or manuals or archival training manuals, and enabling a company to go green and operate without paper.

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