Diversification as Growth Strategy

Question: Discuss about the Diversification as Growth Strategy. Answer: Introduction: It would be correct to say that diversification is one the key corporate strategy to enter a new market. It is believed that diversification strategy is one of the most risky parts of Ansoff market. There are four key parts of Ansoff matrix (Selby, 2015). These four parts are the four strategies to enter a new market. The diversification strategy is used when the firms would launch the new products in the new market. The key part of the differentiation strategy is that both markets and products are new. In the diversification strategy business has no experience in the new market and does not know if the product is going to be successful. Generally the company would use the diversification strategy when it has the funding to take risks and manage the operations in the new market. It is important that the diversification strategies should be aligned well with the mission and vision of the organization. It would be correct to say that diversification strategy is one of the key growth st rategies for organizations. The example of organizations that exhibits diversification strategies can be discussed as: Example: Unilever is a global conglomerate that operates in almost every part of the world. Last year, the company launched a night cream in the Malaysian market (Ardito Ernst, 2015). This is an example of diversification strategy. Example: Toyota is an established automobile player. In the year 2010, the company launched a new car in Bangladesh. It was a new car from Toyota in Bangladesh. This is also an example of diversification strategy. References Ardito, L., Ernst, H. and Petruzzelli, A.M., 2015, January. Technology characteristics, firms diversification strategies, and new product introduction. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 10389). Academy of Management. Selby, J.T., 2015. On the Relationship Between Product Diversification and Firm Performance.