Conglomerate Diversification Strategies

One way to manage risk is by using an investment strategy called diversification. Diversification means buying a variety of investments in different asset classes, choosing them both on their own merits and because, in combination, they may help you keep risk in check without significantly reducing return.

Intensive Strategies and Diversification Strategies

A product development strategy may be appropriate if the firm's strengths are related to its specific customers rather than to the specific product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customers. Similar to the case of new market development, new product development carries more risk than simply attempting to increase market share.


The Joint Effects of MNE's Diversification Strategy on Performance and Systematic Risk Evaluated in China Investment

Market development options include the pursuit of additional market segments or geographical regions. The development of new markets for the product may be a good strategy if the firm's are related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more risk than a market penetration strategy.