Diversification of production as a way to improve the efficiency of business activities

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As a way to enhance the success of business activities at the national and global markets, diversification of production has long been regarded as one of the most productive, and therefore - common.In the most general terms, diversification of production is a specific and ambitious strategies and practices related to fundamental changes in key parameters of business and product profiling producer.As a rule, the implementation of this strategy, the company refuses to initial or previous activities and moves to a fundamentally new type of commodity production.The main reason for the diversification tend to favor the desire to move away from excessive dependence on a single product market and reorient the activities of the company to other, more promising markets.

For local reasons of diversification can be seen stagnating state of the traditional market, where the company is present, the desire to obtain additional financial benefits and preferences and the desire to reduce the threat of various risks arising from the economic activities of the company.

diversification of production, as a rule, is based on the realization of certain scenarios - strategies, in which the desired transformation and implemented.The most common in current practice were three such strategies:

1. diversification strategy centered, or as it is called -kontsentricheskoy, involves the use of the capacity of already established businesses to empower the company's growth.Typically, this strategy involves the expansion of production, development of production of new marketable products, providing new types of services.

2. The strategy of horizontal diversification at the expense of the development of fundamentally new products and offers it to the market to replace the old.With this strategy, the calculation is that the new products will be consumed by the same customer, for this purpose, in such a scenario diversification, provide a thorough assessment of the marketing of the consumer market and its comparison with the possibilities of the parameters of the company.

3. The strategy of diversification, called conglomerate, is the physical expansion of production capacity, primarily due to enterprise resources that are not directly related to production activities and processes.This is the most complex embodiment of diversification requires additional funding or investment, extensive advertising and marketing activities and highly qualified personnel.

Some sources, as an independent strategy of diversification is considered diversification of risks.Such diversification of production involves the redistribution of the company of its assets in various financial institutions and the transformation of these assets in a variety of financial instruments.

most striking and almost a textbook example of successful implementation of the diversification strategy, the concept is implemented in the 90-ies of the last century, the Finnish company Nokia, which produces and supplies toilet paper.Moreover, a major consumer products company at the time was the Soviet Union.Once the economic problems of the Soviet Union began to grow, the leadership Nokia has decided to refocus its production facilities to produce mobile phones.Successful policy of the company, competent Diversification strategy that allowed Nokia to take in the cellular market leading position and ahead of former leaders of the market - the corporation Ericsson and Motorola.