TYPES OF CORPORATE DIVERSIFICATION When a firm chooses to diversify‚ it faces a decision as to how related the new business(es) is(are) to the existing businesses of the firm. When Charles Bluhdorn was CEO of a company called Gulf+Western in the 1950s‚ he diversified into a host of industries: motion pictures (Paramount Pictures‚ the makers of The Godfather‚ Chinatown‚ and other movies)‚ clothing‚ cigars‚ zinc mines‚ auto parts‚ and sugar‚ among others! In contrast‚ a company such as Cooper
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Unrelated Diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. For example‚ if the shoe producer enters the business of clothing manufacturing. In this case there is no direct connection with the company´s existing business - this The unrelated diversification is based on the concept that any new business or company‚ which can be acquired under favorable financial conditions and has the potential for high revenues‚ is suitable
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The simple change to the machine worked so well that a bystander was rumored to have said the machine crawled along much like a caterpillar. Holt agreed‚ and dubbed his new machine “Caterpillar‚” a name he eventually trademarked in 1910. In 1986 Caterpillar officially changed the company name from Caterpillar Tractor Company to Caterpillar‚ Inc. In the 1930s‚ Caterpillar machines played a main role in the construction of several great United States landmarks that still stand today. Like The Golden
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DIVERSIFICATION. For companies‚ they all want to have bigger market share and earn more profit. So they will find many ways to penetration into the market like diversification. Diversification strategies are used to expand firms’ operations by adding markets‚ products‚ services‚ or stages of production to the existing business. The purpose of diversification is to allow the company to enter lines of business that are different from current operations.There are basically two broad forms of diversification
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LVMH’s Diversification Strategy into Luxury Goods The problem After the case and readings the problems of LVMH there are several problems such as the declining demand for luxury goods because it is linked to political events‚ situation and social trends. (After the attacks of 9/11 an impact on luxury goods has dropped and had automatically an impact on LVMH sales) Secondly luxury products are easy to counterfeit‚ some countries such as china‚ turkey‚ and other still have to improve their
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Caterpillar Inc. was formed in 1925 when Holt Manufacturing Company and the C. L. Best Tractor Co. merged to form Caterpillar Tractor Co. These two companies were formed by Benjamin Holt and Daniel Best‚ thus the two founders of Caterpillar. Throughout their history‚ Caterpillar has continued to update and diversify their product lines to meet the demands of consumers. In 1931‚ the first Diesel Sixty Tractor rolled off the assembly line in East Peoria‚ Illinois‚ offering a new efficient source
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Rural Diversification: The Lake District: Farm Diversification: In the Lake District‚ there are a number of ways in which farm diversification has taken place. For example‚ as the income that farmers receive has decreased‚ they have to creative new ways to make money. On way of doing this is when their sheep are clipped‚ although their fleece is poor quality and colour‚ they can sell it for loft insulation or carpets. Also‚ the Lake District has become a popular tourist destination and as a result
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funds offer a quick and relatively inexpensive way to diversify‚ the purpose of this article is to address the issue of risk reduction through international diversification. This article also provides support for the hypothesis that international market correlations increase after unexpected exogenous shocks. The implication is that diversification benefits may be reduced after such events. National economies have recently become more closely linked‚ not only because of growing international trade
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Discuss: “The concept of efficient diversification implies that for an investor wishing to efficiently assume risk in their portfolio; the risky part of the portfolio should consist of weighted proportions of all possible risky assets.” Abstract: Minimizing investor’s portfolio risk was a dominant goal influencing decision making of investment. The effective method of reducing risks was to efficient diversifying the portfolio. The author’s purpose in this article was to share thoughts and concerns
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BOYAN JOVANOVIC New YorkUniversity The Diversification of Production produce more than one product. In this sense their production is diversified‚ or horizontally integrated. This paper addresses two questions. First‚ why have firms become more diversified over the past century? And second‚ why are diversified firms more oriented toward research and development (R&D) than nondiversified firms? I tackle these two questions under the assumption that a firm diversifies to maximize its efficiency
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