They also acquired Scania AB and MAN SE to improve its commercial vehicle business, as well as venturing into the sports car market through the purchase of Porsche (2009), and the motorcycle market with Ducati (2012). For example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers. Of course, many high-end restaurants may feel that delivery or curbside pickup degrades the image of the restaurant, but other owners make a choice to expand their market reach with convenient purchase options. The goal of such diversification is to achieve strategic fit. A bad reputation Everyone knows how huge General Electric, or GE, is but may not realize how highly diversified it is as well, with operation in many areas. Companies must survey new markets to make sure there is a need or desire and that the new business offering will be accepted by the public. A core competency is a skill se… ‘Brand diversification’ commonly refers to a process of launching a new product in a new market, as seen in Ansoff’s Growth Matrix; examples of such strategy are the McCafe, Nike’s golfing collection, IBM’s business intelligence & analytics, and UberEATS. Notable examples are JP Morgan and Chase Bank or Meryll Lynch and the Bank of America. Companies’ implements related diversification strategies in order to achieve and exploit economies of scope and build a competitive advantage by building on existing resources, capabilities, and core competencies. Altogether, the Volkswagen Group has around 15 unique brands in their passenger and commercial vehicles segments as of 2020. Related Diversification . Related diversification occurs when a firm moves into a new industry that has important similarities with the firm’s existing industry or industries. An example of conglomerate diversification would be Tata Group, which was founded in 1868 and diversified from its humble beginnings as a hotel company into a global multinational encompassing 100 individual companies. Royal Philips of the Netherlands is a leading health technology company focused on improving people’s health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. It wasn't until it diversified horizontally into related markets that the company started to see real growth, launching the Aramis men's fragrance in the 1960s. Thanks to their horizontal diversification strategies, both Pepsi and Coca-Cola now own nearly all the successful beverage brands in the world, driving value and revenue far beyond their own original products. This is due to the Virgin Group partaking in whats known as unrelated diversification the fifth strategy in Ansoffs Matrix. Consumers spend a lot of time and money trying to stay in shape, get healthy and recover from injuries. When the business-units of a company share the inputs, production technologies, distribution channels, etc. It even once owned the television network NBC. Under related diversification the company makes easier the consumption of its products by producing complementing goods or offering complementing services. Concentric diversification occurs when a firm adds related products or markets. Unrelated Diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. In order to illustrate this point, and demonstrate in real terms how horizontal diversification works and what it can achieve, we've compiled a list of companies that have mastered this strategy – whether through aggressive acquisition or in-house product development. Keen to modernise their traditionally hand-drawn animation, the company – rather than start from scratch – acquired a smaller competitor with the requisite levels of experience and expertise already in place. Some firms that engage in related diversification aim to develop and exploit a to become more successful. Looking at Starbucks, the lines of people waiting for coffee during lunch breaks made it a reasonable risk to add more sandwich, salad and breakfast items to the menu. Diversification in business is no different. With over 25 different brands in skincare, cosmetics, makeup, and haircare, Estée Lauder has shown that diversification into related markets – whether through acquisition or in-house production – is the key to growth. Where they are less likely to shop around and leave to a range! A lot of time and money trying to stay in shape, get healthy recover. 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