Diversification Strategy Essay Example | Topics and Well Written Essays - 2000 words

Diversification Strategy - Essay ExampleThis research tells that in order to survive in todays market and especially when SMEs experience high contender from the rival companies or a decline in their profit levels, a diversification strategy leave behind be of great importance to the continuity of the SMEs. Emerging economy firms tend to expand culturally, geographically and economically. As such, diversification may enable these firms to gain various benefits. Diversification entails three dimensions the product, the market, and the technology of the firm. Another rendering by Chandler is that diversification refers to the simultaneous departure from the present product line and the present market structure. Also, Ansoff delimitate diversification as entailing product, market, and change in the role of the management of the firm. During this process, a firm has to acquire wise competencies, skills, and techniques both for the mod market and the also for the new product. He fur ther emphasizes that the firm has to engage in changing the role of management of the firm. Further, Grandstand defined technology diversification as a fall in which the firm improves the performances or the number of functionalities of existing products through the use of new technology. Therefore, diversification tail assembly also be defined as the process by which a firm enters into a new market, without essentially leaving its obtainable products, such that it produces a new product or products. This strategy inevitably a change in the organization it should also develop new technologies within the firm. In addition, Rumelt implied that in that respect is global diversification which is defined as a strategy of locating employment activities in outside jurisdiction that are relatively diverse in terms of legal structures, national cultures, ways of doing business, provision and implementation of international manufacturing, which is a process that deals with issues that arise when SMEs firms in emerging economy locate production facilities in a particular site.