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Presentation On Conglomerate Diversification: Presented by Pawan Singh Geetha

The document presents on conglomerate diversification, which is a strategy where a company adds dissimilar and unrelated products or services to its existing lines of business. This allows companies to share a common base but diversify into new areas. However, managers may lack expertise in the new areas and it can be difficult to achieve synergies across unrelated businesses. The presentation discusses objectives of conglomerate diversification like growth and risk reduction. It notes conglomerate diversification can be achieved internally or externally through mergers and acquisitions.

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209 views8 pages

Presentation On Conglomerate Diversification: Presented by Pawan Singh Geetha

The document presents on conglomerate diversification, which is a strategy where a company adds dissimilar and unrelated products or services to its existing lines of business. This allows companies to share a common base but diversify into new areas. However, managers may lack expertise in the new areas and it can be difficult to achieve synergies across unrelated businesses. The presentation discusses objectives of conglomerate diversification like growth and risk reduction. It notes conglomerate diversification can be achieved internally or externally through mergers and acquisitions.

Uploaded by

pwnsingh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Presentation on Conglomerate Diversification

Presented by Pawan singh Geetha

Conglomerate Diversification
Under this strategy, dissimilar products/services are added to the existing line of business. Such product/services are altogether different, but are sharing a common base (of company). For Ex: Sugar-Industry

Paper-Industries

That means, the suggested products may be grouped with existing product line (by sharing a common base).

Problems with conglomerate or unrelated diversification: Managers often lack expertise or knowledge about their firms businesses.

It is a growth strategy that involves adding new products or services that are significantly different from the organizations present products or services. Such a form of strategy requires knowledge of available opportunities and threats to the company before taking decision to diversify.

Objectives:
I. To achieve growth rate higher than what can be realized through expansion.

II. To avail of potential opportunities of profitable investment. III. To spread the gain of increased stability. IV. To achieve distinct competitive advantage and broader stability. V. To improve the price earning ratio and bring about a higher market-price of shares. VI. To make better use of financial resources.

This strategy can be achieved internally or externally- through the means of mergers and jointventures, which are common in practice. Internal Conglomerate Diversification: In India, the growth of Godrej, Reliance Industries, HMT, and DCM is the result of conglomerate diversification mainly through internal development.

External Conglomerate Diversification: These are done through acquisitions, mergers and jointventures.
EX: MARUTI SUZUKI JOINT VENTURE, NIPPON DENRO ISPAT Ind., TATA and BRITISH Petroleum have been introduced to Indian business scenario.

Thank you

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