The process of firms expanding their operations by entering new businesses:

acquisitions

strategic aliances

joint ventures

internal development

Enables a firm to benefit from horizontal relationships across different businesses in the diversified corporation by leveraging core competencies and sharing activities

e.g. production and distribution facilities

This enables a corporation to benefit from economies of scope - cost savings from leveraging core competencies or sharing related activities among businesses in the corporation.

• vertical or hierarchial relationships

A firm entering a different business that has little horizontal interaction with other businesses of a firm.

The creation of synergies from the interaction of the corporate with the individual business units.

• Mergers - 2 organizations of about equal size unite to form one enterprise
• Strategic alliances - temporary partnership of two or more organizations formed to capitalize on some opportunity
• Joint ventures - may result in formation of a separate entity in which equity is shared
• Internal development

Growth

Stability

Defensive

Growth Strategy

Seek to increase organization's business by expanding into new products and markets

• Concentration
• Integration
• Intensive
• Diversification

• No or little change
• Pause and Proceed with Caution
• Profit