Module 7 Assignment

To implement a related business strategy, a firm must begin to engage in business in more than one product or market. The firm moves away from being a single-business or dominant-business to adopt higher levels of corporate diversification (Barney pg. 191). Less than 70 percent of the firm’s revenue will come from a single product market. Also multiple lines of business are linked. An example of a related business strategy is Apple Inc. entering the world of cell phone and tablet market. Since the late 80s, Apple has established themselves as computer company. It is looked upon in high regards with the invention of their Macbook line within the laptop community. When it comes to a luxury laptop no one comes close. Apple didn’t want to just be a force in the computer market but also in the cell phone and tablet community as well. With the edition of the Iphone and Ipad, Apple has widened its range of business. A great idea Apple has implemented amongst their product is the connectivity. If a customer has more than one apple product, information can be wirelessly transferred between the products without internet usage. Other companies such as Samsung who also engage in the trio business of computer, phone, tablet has also adopted this strategy. However even though a related diversification strategy has worked for Apple, others may not flourish within this idea. One disadvantage of a related diversification strategy is operational stress (Edmunds para.5). With every success of a new product comes the increase in demand. Anyone who knows the basics business, with the increase of demand comes the need to increase supply. The introduction of the strategy can cause productivity of employees to reduce (Edmunds para.5). An increase in short-term capital needs and debt expense to fund may be too high. So in conclusion