Innovation management. Diversification (most important)

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Innovation management. Diversification (most important)

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64. DIVERSIFICATION

From an economic point of view, diversification (from the Latin diversus - "different" and facer - "to do") is the simultaneous development of several unrelated technological types of production and services, expanding the range of manufactured products and services.

Diversification enables firms to stay afloat in difficult economic conditions by producing a wide range of products and services: losses from unprofitable products are offset by profits from other types of products that bring stable and high profits.

The process of diversification is associated primarily with the company's entry into new markets. That is, it either increases, expands the market for its existing products, or creates other products for sale in other, new markets. The creation of new products is associated with the use of new technologies, with large financial investments.

However, such a usually complex, time-consuming, lengthy and expensive process justifies itself quite effectively. The functioning of the company no longer depends on the life cycle of one product, but on the diversity of products, on the degree of coverage of sales markets.

At the same time, it is not so much the task of the company's survival that is being solved, but rather ensuring sustainable progressive growth. If a company's products have a very narrow application, then it is specialized; if they find application in various areas of business, then this is a diversified company.

The need for diversification can be due to various reasons. However, most of all, this need can be identified at the stage when the company compares its planned business plan results with the final, actual results that have actually been achieved. It is here, having revealed the inferiority, the company decides on the application of one or another type of diversification.

Types of diversification:

1) related - represents the company's activities in a new area for it, related to existing areas of activity;

2) unrelated - a completely new area of the company's activity, absolutely unrelated to previous areas, thereby representing a considerable risk for the company itself.

Thus, it becomes obvious that related diversification is preferable, since the company operates in a more familiar environment and is exposed to less risk.

The use of diversification is due to the fact that it allows to ensure the successful development of the company not only at this stage, but also in the future.

It can be concluded that by choosing the path of diversification, the company can solve not only current problems, but also ensure the further successful development of its activities.

Authors: Evgrafova I.Yu., Krasnikova E.O.

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In children's literature, children's films and cartoons, children's games, various little animals are teeming - brave bunnies, cunning foxes, hardworking ants, mice, sparrows, etc.

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