Philips. In an investment portfolio, an array of investments types and companies reduces risk and increases chances for long-term gain. The benefit of this related method is it gives simpler expansion: you already … In addition to achieving higher profitability, there are several reasons for a company to diversify. Looking at Starbucks, the lines of people waiting for coffee during lunch breaks made it a reasonable risk to add more sandwich, salad and breakfast items to the menu. But it gathered significant pace in the 1990s and beyond, with the company cementing its place in the entertainment and media industry through acquisitions of Miramax Films, ABC, Fox Family, Pixar, Marvel, LucasFilms, and 21st Century Fox. Their diverse lineup gives them access to a wide range of markets across the world, catering to every possible taste and customer profile. Many major banks have merged with major financial services firms. Thanks to this continued diversification (other prominent products include the iPad, the Apple Watch, and Apple TV) the company has been able to create an entire ecosystem of interlinked tech products – a core driver of its entire business model. This is a horizontal diversification model, introducing unrelated products to the same customer base. Unrelated businesses are those which (1) require unique management expertise, (2) … In this case there is no direct connection with the company´s existing business - this diversification is classified as unrelated. With over 25 different brands in skincare, cosmetics, makeup, and haircare, Estée Lauder has shown that diversification into related markets – whether through acquisition or in-house production – is the key to growth. The acquisition of Pixar is a particularly good example of Disney's approach. Some firms that engage in related diversification aim to develop and exploit a to become more successful. However, the two firms together may be able to operate at an efficient level. In the budget market for passenger cars, Volkswagen sells its own eponymous brand, as well as cars produced by SEAT and Skoda. Diversification allows for more variety and options of products and services. Companies’ implements related diversification strategies in order to achieve and exploit economies of scope and build a competitive advantage by building on existing resources, capabilities, and core competencies. Related. Related Diversification . Credit card payments collected by DeltaQuest Media (Ireland) Ltd, Company No IE548227, Registered address: The Black Church, St. Mary’s Place, Dublin 7, Ireland. Or if you’re with Spring-Green Lawn Care, you might consider adding Over the years, however, the company has made a spate of acquisitions in the automotive business, acquiring other car brands and marques to cater to a wide range of customers. Yet Lauder started as a simple makeup and cosmetics brand in 1946, with a catalogue that included just three products: lotions, creams, and cleansing oil. For example, if the shoe producer enters the business of clothing manufacturing. Well-known, highly innovative companies include Intel, Google, DuPont, and all the pharmaceutical companies. Related diversification occurs when a firm moves into a new industry that has important similarities with the firm’s existing industry or industries. Related diversification is when a company operates several businesses that are linked together in some way or has several related product lines. Under the guidance of Steve Jobs, however, the company's fortunes changed drastically, with the groundbreaking launch of the iMac and iBook series in 1997. 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