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Foreign Market Entry and Diversification

Foreign Market Entry and Diversification - Research Paper Example

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Diversification is a much hyped topic and forms a part of strategic decisions and firm’s needs to decide whether they should diversify or not to diversify. It has been the most debated topic by business and it has been said that firms which has the resources and capability to…

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Foreign Market Entry and Diversification

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Subject: Business
Type: Research Paper
Level: College
Pages: 4 (1000 words)
Downloads: 3
Author: ernieupton

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y diversify for better opportunities, to leverage the competencies as well as capabilities by way of expanding into business where the firm’s resources can be used as competitive assets. Also to some extend diversifying will help the company to minimize the risk but as pointed earlier the risk involved is high. There is no guarantee that the business will succeed (Rao, et al, 2009, 228). The publishing company which deals with books and other publishing items should continue with its business and go for related diversification.

The publishing company should opt for related diversification strategy and involve into acquisition of business which are related in terms of technology, products or markets. Related diversification also termed as concentric diversification occurs when combined profit tends to increase the opportunities and strengths and thereby minimizes the threats and weakness (Orcullo, 2008, 76). Thus the publishing firm may search for new business whose product, market, distribution is similar to that of its own and where acquisition would result in “synergy.

” Thus the company in order to create synergy should enter into related diversification and share resources and capabilities with its existing business unit. With the growth of online and digital media, the publishing business has been undergoing significant changes. Thus considering the current situation the publishing business should diversify its business into emerging and developing countries and at the same time follows the emerging trends in the publishing industry which are like eBooks, blogs, mobile publishing along with self publishing (ICMR, 2007).

While diversifying the business the publishing company can opt for strategic alliance. Strategic alliances are formed through partnership between the firms and combining the resources, capabilities and core competencies and pursue a mutual interest to develop, manufacture and also manufacture goods (KAZMI, 2008. 187). The alliance is a

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