Corporate strategies of diversification

Any attempt to create new products or develop new services has a high chance of failure. It’s wise to play the long game and work on innovation over time, which can be challenging for companies wanting to diversify quickly.

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• Complexity:

The bigger a corporation, the more internal complexity it will have, particularly for conglomerates absorbing new businesses. Expansion can lead to management issues, inefficiency, and inadequate resource allocation.

A bigger organization requires more delegation, oversight, and quality control.

• Walt Disney
• Walt Disney Company successfully diversified from its core animation business to
• theme parks,
• cruise lines,
• resorts,
• TV broadcasting,
• live entertainment, and more.

• General Electric

General Electric commonly comes into discussions when talking about successful diversification stories. GE began as an 1892 merger between two electric companies and now operates in several segments: Aviation, energy connections, healthcare, lighting, oil and gas, power, renewable energy, transportation, and more.