Instructions:
Complete the following discussion by answering all the questions. Discussion post should be at least 300 words.
Discussion Questions:
- When is a company likely to choose a) related diversification and b) unrelated diversification?
- What factors make it more likely that a) acquisitions or b) internal new venturing will be the preferred method to enter a new industry?
- Imagine that IBM has decided to diversify into the telecommunications business to provide online cloud-computing data services and broadband access for businesses and individuals. What method would you recommend that IBM pursue to enter this industry? Why?.
- Under which conditions are joint ventures a useful way to enter new industries?
- Identify Honeywell portfolio of businesses, which you can find at its website (www.honeywell.com). In how many different industries is Honeywell involved? Would describe Honeywell as a related or unrelated diversification company? Has Honeywell diversification strategy increased profitability over time?
- Discuss how a diversified company can increase its profitability.
- Why internal new ventures are relatively infrequent?
- Discuss why many acquisitions are unsuccessful.
- Discuss the difficulties companies face in creating successful joint ventures, , and how such difficulties may be minimized.
- Discuss how an appropriate strategy will minimize the need to restructure an organization.