A Model for Diversification

Abstract

During the past few years, many interesting papers have been written on the subject of product-market diversification. A majority of the writers have dealt with either case histories of successful diversification or with qualitative check-off lists to be used in analyzing specific diversification opportunities. A much smaller group of papers has been devoted to formulation of a systematic approach which a company can use to compare alternative diversification decisions. This paper falls in the latter category. As a first step, diversification is defined and distinguished from other company growth alternatives. Typical growth perspectives are described which may motivate a company to diversify. Diversification objectives are established and related to the company's long-range objectives. A two-step evaluation scheme is proposed for selection of the preferred diversification strategy. The first is a qualitative step, which narrows a wide field of diversification opportunities to a selected few which are consistent with the company's diversification objectives and long-range policy. In the second step, a quantitative procedure is outlined for evaluating the relative profit potential of the selected alternatives. Finally, limitations of the present method are discussed.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 162 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.