A big question in business is: To Diversify or Not to Diversify? Some corporations (e.g., Amazon, 3M and General Electric) have diversified broadly over the years and have had great success. Other diversification attempts (e.g., Time Warnerâ??s purchase of AOL) have taken companies away from their core businesses and their experiences are less successful.
Research two corporations that have had different outcomes (one successful and one unsuccessful) with their diversification strategies. Compare and contrast each corporation's diversification strategy and evaluate the reasons for each oneâ??s success or failure in the venture.
1. Compare and contrast the two businesses--core business, their size, financials, global presence, use of e-business (marketing, sales, etc.).
2. Compare and contrast their outcomes (one successful, one unsuccessful).
3. Analyze the three primary reasons for the different outcomes.
4. Recommend two actions the unsuccessful one could have made to make their diversification venture successful.
Running Head: DIVERSIFY
Successful and Failure of Diversify
Diversification refers to the strategies that are used by the firms to expand their business in the international market through entering in the new market. At the business level and corporate level, firm can diversify their business in the international market. Various firms in the competitive marketplace expand their business. Some firms gain success and some face failure to expand their business. For this paper, GE (General Electronic) and Time Warner purchase of AOL is selected that diversified their business to expand their business in all over the market. There will be discussion about the core business, size of firms, outcomes, reasons of different outcomes, etc. in this paper.
Compare and Contrast
Compare and contrast of business of GE (General Electronic) and Time Warner purchase of AOL are as follow:
Core business: Core business refers to the main theme of the firm in that the firm is running its business. To provide technical products from jet engine to power engine is included under the core business of GE. The firm operates in four segments in that the firm is running its business that are energy, capital finance, customer & industrial and technological infrastructure. To expand the business, the firm diversified its business in television broadcasting and financial services (Global Ergonomics is Core Business at GE, 2011). Time Warner/AOL is result of merger of both firms. At the same time, to provide effective internet and mass media services is included in the core business of Time Warner/AOL (Albanesius, 2009).
To attain good position in the industry is the main aim of core business of GE (General Electronic) and Time Warner/AOL that is similar. Similarities between core businesses of both firms are that both firm focus on the customer satisfaction to enhance their business. Additionally, expansion to increase sales and profitability is also included under the aim of core business of both firms (Sueyoshi, Goto & Shang, 2009).
Size: GE (General Electronic) and Time Warner/AOL both firms are large in size and expand their business in the international market. Both firms has strong base of employees and image in the global marketplace that is similar for both firms (Meet our people, 2011). At the same time, it is ...
A case analysis for the comparison of two corporations are examined.