Question

Give an example of a firm that has diversified with an internal new venture. Was the strategy successful? Why or why not? Now answer these choices questions for a firm that has diversified through acquisitions and through a joint venture.

Answer 1

One of the biggest example is ITC. ( Indian Tobacco Company).They were majorly into cigrrete manufacturing and kind of monopoly in the Indian market. Gradually they started to diviersified their business to toehr segments such as hotels, FMCG , Information Technology etc. The company was successful in their business diversification strategy and thereby they have widen their product and business portfolio. The compoany could abel to disinvest their money to multiple business which has reduced the risk , as based on the dynamic nature of maket they will gain revenue from any one of their diviersified units. This provide them with more confidence on investment and their infrastructure development.