Diversification - a measure of diversity in the aggregate

Diversification - a strategy aimed at reducing risk by adding assets, services, products, banks with assets of the organization.This concept is also used in a more narrow meanings.

The diversification of economic activities - is an extension of the activity of large organizations or industries outside the core business.In a broader sense, this strategy for diversified production.This form of organization is very important in today's market conditions, and has a significant impact on the division of labor and competition.

Diversification of production - is the changes made by the company in order to increase efficiency, economic benefits and prevent bankruptcy.In industry, the most common form of it - a conglomerate and concentric.

first is usually done through the acquisition of highly profitable companies and firms in different industries.A concentric - due to the fact that the company is developing new technologies for the production of products, which refers to the profile in other branches.This is based on in-house development and application of technology acquired in other areas.While these two areas and complement each other, the amount of output increased only at the concentric diversification conglomerate is responsible for the redistribution of the available capital.

There are also types of horizontal and vertical diversification.As for the last stages of assembly and handling of the product.Horizontal diversification is an extension of the range of products to attract more buyers.The best option for the company - it is the combination of these two species.

Diversification - a mobile category.The more areas of activity is, the above its level.It is a major adjustment of the objectives of the company, and possibly change the strategy of the organization.The first is a narrow-spectrum diversification, and the second - a broad, which is not connected with the main production.

Promote this category is due to the desire of economic agents to strengthen its market position in a competitive environment and to react to changing market conditions.

current as of today, the search for new areas of diversification.It is necessary to adapt to new conditions in the economy, which encourages firms to seek the most profitable spheres of potential created in the enterprise.

causes that lead economic agents to produce new products and conquer new segments of the market are:

1) ensuring a stable financial status, together with the release of more profitable products;

2) penetration of the industry in which there is a high rate of return;

3) reducing the risks affecting the profit.

But we should remember that diversification - it is not a means of risk reduction.She, on the contrary, they can increase if the entrepreneur, for example, invests in areas where its expertise can not be sustained.