What is a Diversification Strategy?

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Diversification is a strategy that takes a company into new markets with new products or

services. Companies may choose a diversification strategy for different reasons.

Firstly, companies might wish to create and exploit economies of scope, in which the company

tries to utilize its exciting resources and capabilities in other markets. This can oftentimes be the

case if companies have under-utilized resources or capabilities that cannot be easily disposed or

closed. Using a diversification strategy, companies may therefore be able to utilize all its

capabilities or resources, and able to attract new business from market segments not catered to

earlier.

Secondly, managerial skills found within the company may be successfully used in other

markets, where the dominant logic and managerial procedures of management can be

successfully transferred to other markets.

Thirdly, companies pursuing a diversification strategy may be able to cross-subsidize one

product with the surplus of another. This way, companies with a very diverse portfolio of

products catering to different markets may potentially grow in power, and be able to withstand a

prolonged period of price competition etc. When having subsidized one product for a substantial

period of time, the company might possibly be able to win a monopoly, making it the only

supplier in the respective market.

Fourthly, companies may also want to use a diversification strategy to spread financial risk over

different markets and products, so that the entire success of the company is not reliant on one

market or product only.

There may however be other reasons for companies to use a diversification strategy than the four

listed above, and companies may very well benefit from a diversification strategy for other

reasons.

However, it is important for companies to realize the possible danger of diversifying its scope of

operations to much. Companies might risk neglecting its core capabilities and become too

diversified, where too many different products supplied to different markets might have negative

effects on products and services, where e.g. product quality or uniqueness might suffer due to the

shift in focus on different products and markets.

The diversification strategy can be split into two different types:

1. Related diversification

2. Unrelated diversification

Dell's Diversification Strategy: 'A Day Late and a Dollar Short?'

Published: September 01, 2010 in Knowledge@Wharton

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When Dell launched its first smartphone in the U.S. on August 24, early product reviews were

dismal. Compared with the slew of other nifty new smartphones available today, critics groused

that the only thing remarkable about the phone -- called the Aero -- was its $99 price tag. They

have deemed its hardware mediocre, its operating system -- running on a 16-month-old version

of Google's Android -- outdated, and the requisite smartphone bells and whistles disappointingly

meager.

If Dell wanted to find a bright side to the phone's debut, it was that it went largely unnoticed, for

two reasons. First, in an increasingly crowded smartphone market, one more new entrant hardly

causes a ripple anymore. Second, the launch was overshadowed by a bigger, more dramatic

event that has been unfolding for weeks at the $53 billion, Texas-based company -- the bidding

war against rival Hewlett-Packard for a small, little known developer of high-end data storage

technology called 3PAR. After having initially offered to buy 3PAR for a little more than $1

billion in what looked like a sure-fire deal in mid-August, Dell found itself in a face-off with

Hewlett-Packard (HP), whose second counter-offer reached $30 a share, or $2 billion. (The one-

upmanship seemed likely to end in HP's favor when Knowledge@Wharton was about to publish

this article on September 1). All this to own a company with just under $200 million in 2009

revenues.

Both the lackluster smartphone launch and the 3PAR tug-of-war make one thing clear -- nothing

about Dell's attempts to reinvent itself from a PC and server maker to an all-encompassing IT

products and services company has been easy, says Daniel A. Levinthal, a Wharton professor of

management. "[Dell] seems to have lost sight of what it's good at and how to find new

opportunities to leverage that." This is in sharp contrast to the Dell of yesteryear, he says, which

confidently won "customers who valued its tightly run business model," designed to churn out

economically priced computers with a snap of the finger. "Dell hasn't become any less wonderful

at doing that," he notes. "But guess what? The world has changed."

The problem, according to Levinthal and other Wharton experts, is that Dell woke up too late to

this changed world, even as competitors like HP snatched away its once enviable market lead by

offering sharper products and services. With founder and chairman Michael Dell back in the

CEO post since 2007 after a three-year break, the company has been at pains to claim a bigger

stake in higher-margin corporate-focused businesses -- like the storage services that 3PAR offers

-- and fast-growing consumer markets such as smartphones. But do Dell's ambitions add up?

Not yet, observers say. Despite the early achievements of its groundbreaking, low-cost business

model, "Dell has leadership issues, it has competitive advantage issues and it has strategy

issues," suggests Saikat Chaudhuri, a Wharton management professor. "Dell sees the need for

diversification, but does it see the need for transformation? There is a big difference."

Forgetting the Customer

In their new book, Strategy from the Outside In: Profiting from Customer Value,George S. Day,

a Wharton marketing professor, and Christine Moorman of Duke University's Fuqua School of

Business write that Dell's plight is typical of a company that becomes so good at what it does --

in this case, manufacturing and delivering low-cost PCs -- that it misses cues from its market that

the company needs to change. Dell has succumbed to what the authors call "inside-out hubris."

"To formulate an effective competitive strategy, we argue that you've got to stand from outside

the firm and look at it through the respective lenses of competitors, customers, channel members

and so forth," says Day, who is also co-director of Wharton's Mack Center for Technological

Innovation. "That worked really well for Dell. It was a company that prospered through the

1980s and a good part of the 1990s with a really clear-cut customer value proposition. It was able

to master logistics and deliver standardized hardware at prices and speeds no one else could

match."

However, like other successful companies, "Dell began to think, 'We know this market better

than anyone else,'" Day notes. "So the focus shifted from the 'outside in' [approach of] looking at

its position in the market to thinking, 'How can we maximize earnings out of our existing

resources and capabilities'" at the expense of, rather than in addition to, thinking about what its

customers need.

Still, that low-cost model -- and what Day refers to as Dell's "monolithic focus on efficiency" --

has served it well, according to experts. "Around 1997, when Dell was the strongest, it was

holding about one week of inventory. All the competitors were holding two or three months,"

says Serguei Netessine, professor of technology and operations management at Insead in France

and co-director of the Insead-Wharton Alliance. "That created a huge difference in the cost

structure -- computers lose value very quickly. Each week that a computer sits on a store shelf, it

loses about 1% of its value. So Dell was winning." According to Netessine's estimates, Dell's

costs were around 8% less compared with competitors at the time, like IBM or Gateway -- a

difference that helped the firm become number one in the global PC market.

And today? Having been usurped by HP as the top PC vendor, Dell is fighting to stay in second

place. "Dell still has an efficient supply chain. It is constantly improving and taking out

inefficiencies," says Netessine. Yet the 8% cost advantage has dwindled to around 2% as other

companies have learned how to improve their own supply strategies. "It's hard to have any kind

of meaningful advantage with 2% because Dell's products are not dramatically better or different,

or more reliable, and the company doesn't offer any better service," he adds. "That's not

sufficient to sustain the dramatic growth that Dell had in, say, 2000."

Not that its growth today isn't enviable, especially considering the beating that many computer

firms -- including Dell -- took during the recession. For the second quarter of the current fiscal

year, which ended July 30, Dell reported a profit of $545 million on revenues of $15.5 billion,

compared with a profit of $472 million on revenues of $12.8 billion a year ago. Meanwhile, cash

and equivalents at the end of July were $13.1 billion. During the results announcement, Brian

Gladden, Dell's chief financial officer, attributed much of the growth to "overdue client refresh" -

- that is, large corporate customers increasing IT spending after the belt-tightening of 2008 and

2009. Sales for its servers, storage and networking products were up 43% to $4.3 billion.

Services revenues increased 57% to $1.9 billion.

As for computers, Dell managed to hold on to its lead over Acer, but just barely, with 10.6

million PCs shipped (up 19.1%), behind HP's 14.8 million units and slightly ahead of Acer's 10.2

million. Server shipments, too, grew in the second quarter: According to Gartner estimates, Dell

was in second place, with nearly 550,000 servers shipped (up 35%), compared with HP's number

one slot at 644,00 units and IBM's number three slot at 270,000.

However, no company in the fast-changing hardware and software sectors can take its market

share for granted. The challenge was made especially clear in the recent jostling in the notebook

computer market. All the big incumbent vendors have been ceding market share to aggressive

rivals over recent months -- and then came Apple's iPad in the spring. According to Deutsche

Bank analyst Chris Whitmore, the new iPad helped Apple double its share of the global notebook

computer market, leapfrogging Dell and other second-tier vendors like ASUS, Lenovo and

Toshiba, and moving it to third place, behind HP and Acer.

Being eclipsed by Apple and the new iPad goes to the heart of Dell's struggle. Dell is no Apple,

says Netessine. "Dell has never invented a notable product. What it has done is deliver a basic

product that someone else has invented but get it to consumers much more efficiently. To be an

Apple requires a little bit more. [Apple] is structured around innovation. It has been innovating

its whole life."

Into the Clouds

That explains why Dell wants to focus less on hardware and more on services -- or what

Netessine calls "servicization." Converting products "that are commoditized into services --

which are ... harder [for consumers] to shop around for and compare with one another -- is

popular among manufacturers nowadays," he notes.

Dell is betting on the growing interest among its corporate customers in cloud computing

services -- Internet-based computing that lets companies access resources, such as software and

storage, which providers like Dell host remotely on their behalf. Dell's $1.4 billion acquisition in

2008 of EqualLogic (which posted $800 million in sales for the first six months of fiscal 2011)

and a partnership with storage giant EMC have already enabled it to begin providing cloud-

computing services for small- and mid-sized companies.

For some companies, Netessine suggests that servicization can be a big shift. "You have to really

change your focus from short-term selling of a product to thinking about five, 10, 15 years down

the road and possibly bundling some kind of service agreement with customers buying those

products," he states. "Thinking carefully about the life cycle of those products -- what kind of

contract do corporate customers want; can you support customers with extended service

agreements; can you offer some kind of multi-tiered services -- requires very different expertise,

but I don't think it is as far removed from Dell's core strengths as, for example, selling

smartphones."

Several recent acquisitions move Dell further in the servicization direction. That includes its

biggest-ever acquisition, the $3.9 billion deal last year to buy (at a 68% premium) IT

management and solutions provider Perot Systems, which is currently being integrated into the

Dell Services unit.

"I'm wondering whether all this is too little too late," says Chaudhuri. "What I'm missing are

some bold moves." Compare Dell's acquisitions with HP's, he adds. In 2008, HP expanded its

services offerings by buying a frontrunner -- Electronic Data Systems -- for more than $13

billion. Shortly after, software company Oracle bought Sun Microsystems for $7.4 billion to get

into the computer hardware market for the first time. What these companies want to do,

according to Chaudhuri, is emulate IBM, which sold its computer manufacturing to Lenovo and

shifted into services by buying PricewaterhouseCoopers Consulting in 2002 for $3.5 billion.

David Hsu, a Wharton management professor, agrees that Dell has the cash and the clout to push

its strategy further than it has been, despite concerns about tougher times ahead if the U.S.

tumbles back into a double-dip recession. "There's a tendency to focus on profitability and

operations, and not make a strategic move, but I don't think the shareholders would like it, even

in an environment like ours," he says.

Smaller acquisitions for a company like Dell shouldn't be overlooked, however, observes

Lawrence G. Hrebiniak, a Wharton professor of management. "It doesn't matter whether an

acquisition is big or small. The question is whether Dell finds something to acquire that fits

logically or extends its strategy. Is Dell buying growth but destroying value?"

As Hrebiniak sees it, while the 3PAR acquisition makes sense as a way for both Dell and HP to

expand their services, the premium both were willing to pay does not. He adds that the bidding

war has been more about HP-Dell politics than 3PAR. "There's a little ego involved," he

suggests. "HP got rid of [CEO Mark Hurd in August] and it wants to prove to the world that it

can still make strategic decisions without him.... And Dell still wants to beat HP badly because

HP has beaten them in PCs."

The 3PAR win, if successful, would be good timing for Michael Dell. In July, he agreed to pay

$4 million, and the company agreed to pay $100 million, to settle a case in which the Securities

and Exchange Commission (SEC) accused Dell executives of misleading investors about its

profitability. A month later, at the company's annual general meeting, one-fourth of Dell's

shareholders refused to vote for Michael Dell's reelection to the board as chairman. That's why

"he wants to show that he's still okay -- even though a quarter of his shareholders don't think so -

- that he can do a lot of good things for shareholders and they're wrong for picking on him,"

notes Hrebiniak.

All Things to All People

According to Day, Dell needs to sharpen its focus. He describes the current strategy as "a day

late and a dollar short.... HP and others have been expanding into services far longer than Dell

has." He suggests that part of Dell's challenge is shaking its obsession with internal efficiencies

to focus outwards. For companies such as Dell, "you have to go out and live with your customers

and channel members, and focus not only on what your competitors are doing in your markets

but also on what they're doing elsewhere."

Other experts raise concerns about Dell's inability to articulate its priorities. Is it smartphones

and the like for consumers? Is it one-stop shop products and services for its corporate customers?

Is it PCs and laptops for everyone? Or a little bit of everything? "I'm not sure if Dell is hedging

its bets or if it is uncertain of where it wants to go, or if it wants to be an all-round big player,

like an HP that straddles both worlds," says Chaudhuri. "At present, it looks like it's not sure

where it can make much impact."

Dell is "trying to be an 'everything' IT business, a diversified company," adds Netessine. "The

problem is that it's extremely hard to do all of those things well. It's hard to see how Dell can ...

compete with all those powerful companies that have been in the business longer and have much

better products in many cases."

It is a problem when companies like Dell "try to take an option on many, many different

segments," says Hsu. "It can be very expensive as well as confusing [to send] mixed signals not

only within its own organization, but also to the outside world as to what is unique about Dell."

What Dell needs to remember, he adds, is that "you don't have to master the whole value chain in

order to be a valuable company."

Product Diversification Strategy

by Ian Linton, Demand Media

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A product diversification strategy can help your business grow.

Related Articles

How Does a Multinational Company Use the Diversification Strategy in Decision Making? What Are the Benefits of Concentric Diversification? Elements of Product Strategy The Advantages of a Product Differentiation Strategy Retail Product Strategy The Purpose of Product Attribute Leadership Strategy

A product diversification strategy is a form of business development. Small businesses that

implement the strategy can diversify their product range by modifying existing products or

adding new products to the range. The strategy provides opportunities to grow the business by

increasing sales to existing customers or entering new markets.

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Objectives

Set your objectives for product diversification. You can take a defensive approach with the

objective to protect your business if, for example, demand drops for your products or you face

strong competition. This might be important for news companies that have built their business on

a single product. Declining market share or revenue could threaten the survival of your business.

Alternatively, you can take an offensive approach where you see a strong market opportunity but

can’t take advantage of it with your existing products.

Approach

You can approach product diversification in a number of ways. You can modify your existing

products so that the new version appeals to a different group of customers. If you make tools for

building professionals, for example, consider developing a version that appeals to amateur users.

An alternative strategy is to offer new products to your existing customers. A retailer of fruit and

vegetables could introduce a range of health foods that appeal to the same customer group.

Another approach is to add a new product to your range, aimed at a new group of customers.

Source

Product diversification can be an expensive, time-consuming task. Analyze whether you have the

resources to develop new products or modify existing ones. If you don’t want to develop

products internally, consider other options such as distributing products from other suppliers,

taking out licensing agreements to manufacture or supply products developed by other

companies, or setting up alliances or partnerships with other companies to jointly develop or

market products. If your company is in a strong financial position, consider acquisitions to gain

access to products that align with your diversification strategy.

Resources

Assess the resources you need to implement your strategy. Set a budget for the diversification

program to cover development and marketing costs. Consider the supply chain implications of

your new products. You may have to find new suppliers and build effective working

relationships with them. Review your sales and marketing resources. Does your team have the

product and market knowledge to achieve your sales targets? If you plan to manufacture the

product yourself, do you have the production capacity or will you need to invest in new plant or

hire more staff? If your new product sells through retail outlets, can you access a suitable

distribution network?

Risk

Product diversification is a high risk strategy, so it’s important to assess both the opportunity and

the level of risk. Focus on product diversification that represents an attractive opportunity for

your business, such as an instance where the market is growing and no other company is meeting

the demand. Provided the costs of developing and marketing the new product allow you to earn a

profit, this is an opportunity to pursue. Risk increases if the new product might take sales away

from your existing products or if the cost of market entry is very high. In those scenarios, the

benefit to your company may not offset the risk.

Research

Before committing resources to product diversification, carry out research to ensure that you

understand the needs of the market. Use the Internet to identify potential competitors and find

out more about their products and prices. Carry out a small-scale market test to evaluate the

potential of your strategy. Ask for customers’ feedback on their experience with the product.

Evaluate the results of your sales and marketing activities in the test. Analyze the cost of taking

the product to market so you can prepare an accurate budget for launching the new product.

Google diversification strategy?

Posted on March 12, 2010 by sebastian

Although the vast majority of Google is search engine market, the reality is that after 10 years

the Mountain View giant has become the largest advertising agency in the world.

Over the past year, Google reported total gross revenues of $ 24 billion USD. If we discount the

6 billion paid to its partners (with whom they share the advertising revenue), net revenues are in

the range of $ 18 billion.

If we look at the chart above, supplied by Business Insider, Is quite obvious that almost all

revenue comes from ads on Google’s sites. Only a small portion of revenues comes from

Adsense or other services offered by the new media company (Google Apps, Youtube, Picasa,

etc).

Is Google’s diversification strategy working?

Even do Google has been one of the most prolific internet companies when launching new online

and mobile services, still after ten years almost 90% of their revenues are coming from their

most basic and oldest product.

Why the diversification program Google launched many years back by introducing other product

lines like Gmail, Youtube, Picassa, Doubleclick, AdMob, Google Energy and others does not

translate into a significant level of revenues?

It seems that the source of monetization that Google found on the search market, has not yet

found on other business divisions. Again, the key challenge for most internet companies today is

how to monetize the value created by their applications or services.

Moreover if we look how much Google has invested on diversifying their portfolio; for instance

Youtube was acquired in 2006 for 1,650 million USD.

Anyway, Google’s strategy could work in the long term. If we look closely on year 2009,

revenue from ads on their sites accounted for 83% of the total. Compared to 2008, this item

represented 90% of Google’s total income. Nevertheless, the growth rate of these “windfall” is,

so far, relatively modest.

Is Google a facing a major risk due to their dependency in only one source of revenues? Could a

loss in their share in the search market against Bing or Yahoo jeopardize Google’s future?

The is other angle that we are not able to assess in this graph, such as the impact of mobile

internet exponential growth driven by our paranoia of real-time information and the increasing

power of social networks, which inevitably will end up affecting the search industry and

therefore Google’s current revenues. Just as an example, online users spend more time on

Facebook than in Google, Yahoo, MSN, Youtube and wikipedia together!

Google is aware of this and has already begun to position themselves strategically. Its foray into

the mobile world with Android OS, the recent AdMob acquisition, Twitter and Facebook

included their search results and the launch of its latest social media attempt, Google Buzz,

confirm that the battlefield is now for the end user’s mobile.

Advantages & Disadvantages to Corporate

Strategy Diversification

By Alan Li, eHow Contributor

Diversification

in corporate marketing is selling new products in new markets.

In a corporate marketing context, diversification is the strategy of increasing profits through

selling new products in new markets. As with all strategies, it has advantages and disadvantages,

and management can use these advantages and disadvantages to different ends.

Other People Are Reading

The Advantages and Disadvantages of Ethical Diversification Strategies

Advantages & Disadvantages of Diversifying Into an Unrelated Business?

Print this article

1. Uses of Diversification o Diversification in corporate marketing can be turned to both offensive and

defensive ends. On the offensive, it can be used to increase the corporation's

profits through starting up enterprises in untapped markets. On the defensive, it

can be used to spread the corporation's assets so as to protect against downturns in

one market.

Profit

o The biggest potential advantage of diversification is the increase in revenue.

Diversification means selling a corporation's products in a new environment that

it has not attempted to tap into on prior occasions; a successful venture there can

result in an entirely new stream of revenue. Better still, such enterprises do not

compete with the corporation's older holdings and tend to offer higher rewards

than those from the preexisting enterprises.

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Cost

o One major disadvantage to diversification is the cost of starting up new businesses

in new markets. It is more difficult for corporations to secure resources to start

such enterprises because the element of risk is higher. Furthermore, there is no

guarantee that the new enterprise will start producing in the near future, and a

corporation may have to sustain a loss for consecutive periods before it has

attained enough market penetration to start making a profit. Depending on when

and how much profit, new enterprises may not be worth the investment.

Risk

o Another major disadvantage to diversification is that it is the riskiest of all

possible marketing strategies. Since the corporation is selling new products in

new markets, it has neither the expertise to produce and market those products nor

the expertise to sell in those markets. As such, it will need to spend the money to

either acquire the expertise or the information to do both, and there is a chance

that its preexisting management will not be able to do so effectively, which could

turn a potentially profitable project into a resource sink with no payout.

Product Diversification Strategy

By Laura Acevedo, eHow Contributor

Diversification

Product diversification involves modifying existing products in order to expand the market

potential of a product. From changes in brands to changes in a product's target market, product

diversification can obtain new clients for your product by leveraging an existing product's

reputation and development platform to produce and sell a modified product. Successful product

diversification requires accurate targeting and product differentiation to prevent eroding your

current market and increase overall sales and profits.

Other People Are Reading

1. Brainstorm

o Brainstorm potential markets for an existing product with slight alterations.

Consider geographic differences, demographic differences such as gender and

age, and features that appeal to different groups. Obtain a strong list of potential

new products for diversification efforts.

Market Research

o Based on product brainstorming, conduct extensive market research into the

viability of new products. Make sure new products align with different target

markets than the customer base for your existing product to avoid eroding market

share for your current product. Conduct surveys, focus groups and product trials

to ensure product success prior to launching a new product.

Demographic Diversification

o Diversify your product base by implementing changes in your demographic

targets. A good example of demographic diversification by age is "Teen People"

magazine. The standard "People" targets adult readers whereas "Teen People"

targets preteens and teenagers. This diversification added readership and

leveraged an existing brand to diversify and increase revenue. Consider

demographic diversification if there are wide differences in preferences for your

product based on gender, age, location or ethnic differences.

Price Diversification

o Diversification can target new price points. For example, Marriott hotels targets

mid- to upper-price point hotel customers. Marriott expanded into budget hotels

by creating new brands---Fairfield Inn and Courtyard by Marriott hotels. Consider

price diversification if there is a wide range of prices for the products or services

you offer.

Product Extension

o Create a new product that builds off your established brand image. For example,

Reebok is known for athletic footwear. Reebok extended this image and created

Reebok Fitness Water to diversify its product line and build off the success of its

shoe line. Consider a product extension strategy if the existing market for the type

of product you offer is already saturated and there are convenient ties to other

product types. This strategy also helps reduce overall business risk by offering

products in a variety of customer categories.

Product Modifications

o Product modifications such as color or different features can help diversify your

product offers. For example, Heinz expanded its ketchup offerings to include

colored ketchup in purple and green. These products targeted consumers with

children to capture additional market share. Consider a product modification

strategy if you have budgetary constraints, or if slight modifications could lead to

expanded market share or reinvigorate your existing product's image.

Đa dạng hóa quá mức: Hiểm họa khôn lường

Trên thị trường chứng khoán, chúng ta luôn được nghe nói đến các ích lợi của

việc đa dạng hóa danh mục đầu tư. Không một ai trong chúng ta muốn "bỏ hết trứng vào một rổ"

hay tự đưa bản thân ra hứng chịu sự rủi ro bản chất của việc chỉ nắm giữ một loại cổ phiếu. Thế

nhưng, liệu bạn có đang đi quá xa trên con đường tự bảo vệ mình hay không? Có những lúc đa

dạng hóa quá mức lại là một rủi ro lớn.

Thế nào là đa dạng hóa? Khi chúng ta nói đến sự đa dạng hóa trong một danh mục đầu tư chứng khoán, chúng ta đang nói đến nỗ lực của nhà đầu tư trong việc giảm bớt rủi ro thông qua việc đầu tư vào nhiều công ty thuộc nhiều ngành, thậm chí nhiều nước khác nhau. Hầu hết các chuyên gia đầu tư đều đồng ý rằng mặc dù đa dạng hóa là một tấm phiếu bảo hành trước rủi ro thua lỗ, nguyên tắc sống còn cho việc đầu tư vẫn luôn là hướng tới các mục tiêu tài chính dài hạn của bạn. Có rất nhiều nghiên cứu đã chỉ ra tại sao đa dạng hóa có tác dụng. Một cách đơn giản, bằng cách mở rộng phạm vi đầu tư của bạn vào nhiều công ty, nhiều lĩnh vực không có nhiều sự liên kết với nhau, bạn sẽ thể kiềm chế bớt được sự biến động giá cả với danh mục của mình do thực tế không bao giờ có chuyện tất cả các ngành đi lên hay đi xuống với cùng một tốc độ và trong cùng một thời kì. Do đó, đa dạng hóa đảm bảo sự hoạt động ổn định hơn cho danh mục của bạn. Điều quan trọng là luôn nhớ rằng cho dù danh mục đầu tư của bạn có được đa dạng hóa đến đâu chăng nữa thì không bao giờ nguy cơ rủi ro về đến zero. Bạn có thể giảm thiểu được những rủi ro gắn liền với các cổ phiếu đơn lẻ (các nhà học thuật gọi là các rủi ro không có tính hệ thống), thế nhưng luôn có những rủi ro thuộc về bản chất của thị trường (những rủi ro hệ thống). Những rủi ro này có thể ảnh hưởng đến hầu hết tất cả các cổ phiếu và sự đa dạng dù ở mức độ nào cũng không thể ngăn chặn được chúng. Liệu chúng ta có thể đa dạng hóa để chống lại các rủi ro phi hệ thống? Về vấn đề này, bài viết muốn nêu ra một câu hỏi: "Bao nhiêu cổ phiếu là đủ cho sự đa dạng hóa nhưng không phải đa dạng hóa quá mức?" Việc sở hữu ba năm cổ phiếu

thay vì chỉ một loại duy nhất luôn luôn là khôn ngoan, nhưng đến khi nào thì việc bổ sung thêm cổ phiếu vào danh mục của bạn sẽ không còn tác dụng trong việc hạn chế rủi ro của thị trường? Trước tiên, chúng ta cần phải biết rủi ro được định nghĩa như thế nào. Cách thức được chấp nhận rộng rãi trong việc đo lường rủi ro là theo dõi mức độ biến động. Điều đó có nghĩa là, một cổ phiếu hay một danh mục đầu tư biến động càng mạnh trong một khoảng thời gian nhất định thì công cụ đầu tư đó càng có độ rủi ro cao. Một khái niệm trong thống kê được gọi là "độ lệch chuẩn" được sử dụng để đo mức độ rủi ro. Trong phạm vi bài viết này, bạn có thể hiểu độ lệch chuẩn là "rủi ro". Theo lý thuyết hiện đại về danh mục đầu tư (modern portfolio theory), bạn đã đến rất gần với điểm đa dạng hóa tối ưu sau khi đã thêm vào danh mục của mình cổ phiếu thứ 20. Trong cuốn sách "Lý thuyết hiện đại về danh mục đầu tư và Phân tích đầu tư" của mình, Edwin J. Elton và Martin J. Gruber kết luận rằng độ lệch chuẩn (rủi ro) trung bình cho một danh mục đầu tư chỉ có một cổ phiếu là 49,2% trong khi tăng số lượng cổ phiếu trong một danh mục có độ cân bằng tốt sẽ giúp giảm độ lệch chuẩn đó xuống mức tối đa là 19,2%. Tuy nhiên, họ cũng nhận thấy rằng với một danh mục 20 cổ phiếu, rủi ro được giảm xuống còn khoảng 20%. Vì thể nên, các cổ phiếu thêm vào từ thứ 20 cho đến thứ 1000 sẽ chỉ giảm mức độ rủi ro của danh mục đi khoảng 0,8% trong khi chỉ 20 cổ phiếu đầu tiên đã làm giảm được đến 29,2% (49,2% - 20%). Nhiều nhà đầu tư có quan điểm sai lầm rằng rủi ro tỉ lệ nghịch với số lượng cổ phiếu thêm vào cho mỗi danh mục đầu tư, trong khi trên thực tế điều này không hề đúng. Có những bằng chứng rõ ràng cho thấy bạn chỉ có thể giảm rủi ro đến một điểm nhất định mà tại đó việc đa dạng hoá hơn nữa không đem lại lợi ích gì. Đa dạng hóa đích thực Những lý luận trên đây không có nghĩa cứ mua vào 20 cổ phiếu bất kì là bạn đã giảm được rủi ro đến mức thấp nhất. Lưu ý rằng ngay từ đầu chúng tôi đã giải thích đa dạng hóa tức là bạn phải mua vào những cổ phiếu hoàn toàn khác nhau, có thể là về quy mô của công ty, của ngành, hay của cả một thị trường. Nói theo ngôn ngữ tài chính, bạn mua các cổ phiếu không có sự liên hệ với nhau - các cổ phiếu biến động theo những chiều hướng khác nhau trong những khoảng thời gian khác nhau. Đồng thời, bạn hãy lưu ý thêm một điểm nữa. Bài viết này chỉ đề cập đến việc đa dạng hóa trong phạm vi danh mục đầu tư cổ phiếu của bạn. Bản thân một danh mục đầu tư hoàn chỉnh của một cá nhân cũng nên có sự đa dạng hóa giữa các loại tài sản khác nhau. Điều đó có nghĩa là bạn phải tính toán và có sự phân bổ nguồn vốn theo tỉ lệ % nhất định vào trái phiếu, cổ phiếu, bất động sản, đồ dùng, và các loại tài sản khác nữa. Các quỹ tương hỗ Sở hữu một quỹ tương hỗ đầu tư vào 100 công ty khác nhau không có nghĩa là bạn đang ở điểm đa dạng hoá tối ưu. Rất nhiều quỹ tương hỗ chỉ chuyên vào một lĩnh vực

nhất định. Vậy nên sở hữu một quỹ đầu tư về ngành viễn thông hay chăm sóc sức khỏe đồng nghĩa với việc bạn đang đa dạng hóa trong phạm vi ngành đó. Tuy nhiên, vì sự biến động giả cả của các cổ phiếu trong cùng một ngành có sự liên hệ khá mật thiết với nhau, việc đầu tư vào một quỹ tương hỗ như vừa nói sẽ không đem lại cho bạn mức độ đa dạng hóa như bạn có thể có được khi đầu tư chéo nhiều ngành, nhiều lĩnh vực khác nhau. Các quỹ đầu tư cân đối có khả năng ngăn ngừa rủi ro tốt hơn một quỹ tương hỗ chỉ chuyên về một mảng nhất định bởi họ sở hữu 100 cổ phiếu hoặc hơn thế nữa của các công ty trên khắp thị trường. Tuy vậy, hhiều nhà đầu tư của các quỹ tương hỗ cũng đã từng phải đối mặt với hậu quả của việc đa dạng hóa quá mức. Một số quỹ, đặc biệt là các quỹ lớn, có quá nhiều tài sản (ví dụ quá nhiều tiền mặt cho việc đầu tư), thế nên họ phải đầu tư vào hàng trăm cổ phiếu. Nói cách khác, chính bạn - nhà đầu tư vào quỹ tương hỗ - đang nắm giữ hàng trăm cổ phiếu đó. Trong một vài trường hợp, việc sở hữu quá nhiều cổ phiếu như thế này khiến việc quỹ tương hỗ đi trước và thu lợi nhuận cao hơn mức trung bình của các hàn thử biểu là điều gần như không thế. Trong khi đó, đây lại chính là lí do then chốt khiến bạn đầu tư vào một tương hỗ và chấp nhận trả cho giám đốc quỹ một khoản phí quản lý. Có thể lấy Fidelity Magellan, một quỹ tương hỗ đã đi vào sách vở với tên tuổi của một huyền thoại trong làng đầu tư chứng khoán - Peter Lynch. Trong vòng từ năm 1990 đến 2004, tài sản của quỹ này đã tăng lên con số 60 tỉ đô. Chúng ta chắc chắn sẽ không thể tiếp tục coi Fidelity Magellan chỉ là một quỹ chỉ số nữa. Nhưng chúng ta sẽ còn phải suy nghĩ và băn khoăn rất nhiều với câu hỏi tại sao một quỹ đầu tư có quy mô lớn đến thế vẫn có thể "vượt mặt" chỉ số S&P 500 về tốc độ sinh lời. Lời kết Đa dạng hóa giống như một cây kem: Hầu hết tất cả mọi người đều đồng ý rằng cả đa dạng hóa và kem là những thứ "tuyệt vời". Điều đó không có nghĩa là bạn có thể tiêu hóa quá nhiều cái tốt. Ăn quá nhiều kem sẽ chỉ khiến bạn đau bụng mà thôi. Ý kiến được nhất trí nhiều nhất hiện nay: Một danh mục phân bổ cân đối với khoảng 20 cổ phiếu sẽ thực hiện được một cách hiệu quả nhất chức năng đa dạng hóa, chống lại rủi ro. Chúng tôi xin được dừng ở đây với câu nói nổi tiếng của Warren Buffett: "Đa dạng hóa quy mô lớn chỉ cần thiết với những nhà đầu tư không hiểu họ đang làm cái gì!"

Diversification (marketing strategy)

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Diversification is a form of corporate strategy for a company. It seeks to increase profitability

through greater sales volume obtained from new products and new markets. Diversification can

occur either at the business unit level or at the corporate level. At the business unit level, it is

most likely to expand into a new segment of an industry that the business is already in. At the

corporate level, it is generally very interesting[clarification needed]

entering a promising business

outside of the scope of the existing business unit.

Diversification is part of the four main growth strategies defined by the Product/Market Ansoff

matrix[1]

:

Ansoff pointed out that a diversification strategy stands apart from the other three strategies. The

first three strategies are usually pursued with the same technical, financial, and merchandising

resources used for the original product line, whereas diversification usually requires a company

to acquire new skills, new techniques and new facilities.

Note: The notion of diversification depends on the subjective interpretation of “new” market and

“new” product, which should reflect the perceptions of customers rather than managers. Indeed,

products tend to create or stimulate new markets; new markets promote product innovation.

Contents

1 The different types of diversification strategies o 1.1 Concentric diversification o 1.2 Horizontal diversification o 1.3 When Horizontal diversification is desirable?

1.3.1 Another interpretation o 1.4 Conglomerate diversification (or lateral diversification)

2 Goal of diversification 3 Risks 4 See also 5 References

The different types of diversification strategies

The strategies of diversification can include internal development of new products or markets,

acquisition of a firm, alliance with a complementary company, licensing of new technologies,

and distributing or importing a products line manufactured by another firm. Generally, the final

strategy involves a combination of these options. This combination is determined in function of

available opportunities and consistency with the objectives and the resources of the company.

There are three types of diversification: concentric, horizontal, and conglomerate.

Concentric diversification

This means that there is a technological similarity between the industries, which means that the

firm is able to leverage its technical know-how to gain some advantage. For example, a company

that manufactures industrial adhesives might decide to diversify into adhesives to be sold via

retailers. The technology would be the same but the marketing effort would need to change.

It also seems to increase its market share to launch a new product that helps the particular

company to earn profit. For instance, the addition of tomato ketchup and sauce to the existing

"Maggi" brand processed items of Food Specialities Ltd. is an example of technological-related

concentric diversification.

The company could seek new products that have technological or marketing synergies with existi

ng product lines appealing to a new group of customers.This also helps the company to tap that

part of the market which remains untapped, and which presents an opportunity to earn profits.

Horizontal diversification

The company adds new products or services that are often technologically or commercially

unrelated to current products but that may appeal to current customers. In a competitive

environment, this form of diversification is desirable if the present customers are loyal to the

current products and if the new products have a good quality and are well promoted and priced.

Moreover, the new products are marketed to the same economic environment as the existing

products, which may lead to rigidity and instability. In other words, this strategy tends to

increase the firm's dependence on certain market segments. For example, a company that was

making notebooks earlier may also enter the pen market with its new product.

When Horizontal diversification is desirable?

Horizontal diversification is desirable if the present customers are loyal to the current products

and if the new products have a good quality and are well promoted and priced. Moreover, the

new products are marketed to the same economic environment as the existing products, which

may lead to rigidity and instability.

Another interpretation

Horizontal integration occurs when a firm enters a new business (either related or unrelated) at

the same stage of production as its current operations. For example, Avon's move to market

jewelry through its door-to-door sales force involved marketing new products through existing

channels of distribution. An alternative form of that Avon has also undertaken is selling its

products by mail order (e.g., clothing, plastic products) and through retail stores (e.g.,Tiffany's).

In both cases, Avon is still at the retail stage of the production process.

Conglomerate diversification (or lateral diversification)

Main article: Conglomerate (company)

The company markets new products or services that have no technological or commercial

synergies with current products but that may appeal to new groups of customers. The

conglomerate diversification has very little relationship with the firm's current business.

Therefore, the main reasons of adopting such a strategy are first to improve the profitability and

the flexibility of the company, and second to get a better reception in capital markets as the

company gets bigger. Even if this strategy is very risky, it could also, if successful, provide

increased growth and profitability.

Goal of diversification

According to Calori and Harvatopoulos (1988), there are two dimensions of rationale for

diversification. The first one relates to the nature of the strategic objective: Diversification may

be defensive or offensive.

Defensive reasons may be spreading the risk of market contraction, or being forced to diversify

when current product or current market orientation seems to provide no further opportunities for

growth. Offensive reasons may be conquering new positions, taking opportunities that promise

greater profitability than expansion opportunities, or using retained cash that exceeds total

expansion needs.

The second dimension involves the expected outcomes of diversification: Management may

expect great economic value (growth, profitability) or first and foremost great coherence and

complementary to their current activities (exploitation of know-how, more efficient use of

available resources and capacities). In addition, companies may also explore diversification just

to get a valuable comparison between this strategy and expansion.

Risks

Diversification is the riskiest of the four strategies presented in the Ansoff matrix and requires

the most careful investigation. Going into an unknown market with an unfamiliar product

offering means a lack of experience in the new skills and techniques required. Therefore, the

company puts itself in a great uncertainty. Moreover, diversification might necessitate significant

expanding of human and financial resources, which may detract focus, commitment, and

sustained investments in the core industries. Therefore, a firm should choose this option only

when the current product or current market orientation does not offer further opportunities for

growth. In order to measure the chances of success, different tests can be done[2]

:

The attractiveness test: the industry that has been chosen has to be either attractive or capable of being made attractive.

The cost-of-entry test: the cost of entry must not capitalize all future profits. The better-off test: the new unit must either gain competitive advantage from its link with the

corporation or vice versa.

Because of the high risks explained above, many companies attempting to diversify have led to

failure. However, there are a few good examples of successful diversification:

Virgin Group moved from music production to travel and mobile phones Walt Disney moved from producing animated movies to theme parks and vacation properties Canon diversified from a camera-making company into producing an entirely new range of office

equipment.