Two types of diversification are:

• Concentric diversification, where the corporate parent launches a new, separate business by leveraging strengths of an existing business, such as the parent of a snowmobile maker starting a personal-watercraft business to compete against Jet Ski and Sea-Doo; the two businesses have some identical manufacturing processes, parts and dealers conglomerate diversification, where the corporate parent gets into a totally unrelated business, such as Berkshire Hathaway owning GEICO, Jordan's Furniture and NetJets, among others.

This paper has two parts.

What are the advantages and disadvantages of concentric diversification?

What are the advantages and disadvantages of conglomerate diversification?

Answer rating: 100% (QA)

Advantages and Disadvantages of Concentric Diversification Advantages 1 Leveraging Existing Strengths Concentric diversification allows a company to capitalize on its existing competencies resources a... View the full answer