...Running head: DIVERSIFICATION STRATEGIES Week 4 Assignment 2 Dr Hassan Yemer Contemporary Business/BUS 508 Strayer University January 24, 2011 1) Compare and contrast the two businesses—core business, their size, financials, global presence, use of e-business (marketing, sales, etc.). A diversified company is one that has multiple, unrelated businesses. Unrelated businesses are those, which (1) require unique management expertise, (2) have different end customers and (3) produce different products or provide different services. One of the benefits of being a diversified company is that it buffers a company from dramatic fluctuations in any one-industry sector. However, this model is also less likely to enable stockholders to realize significant gains or losses because it is not singularly focused on one business. Investopedia (2011) states that companies may become diversified by entering into new businesses on its own, by merging with another company or by acquiring a company operating in another field or service sector. One of the challenges facing diversified companies is the need to maintain a strong strategic focus to produce solid financial returns for shareholders instead of diluting corporate value through ill-conceived acquisitions or expansions. Wal-Mart and Kmart; along with Target are the three primary retail...
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