Diversification involves increasing the range of products or markets served by an organisation.
Related diversification involves diversifying into products or services with relationships to the existing business.
Conglomerate (unrelated) diversification involves diversifying into products or services with no relationships to the existing businesses.
Market penetration implies increasing share of current markets with the current product range.
• builds on established strategic capabilities
• means the organisation’s scope is unchanged
• leads to greater market share and increased power vis-à-vis buyers and suppliers
• provides greater economies of scale and experience curve benefits.
Consolidation and retrenchment
• Consolidation refers to a strategy by which an organisation focuses defensively on their current markets with current products.
• Retrenchment refers to a strategy of withdrawal from marginal activities in order to concentrate on the most valuable segments and products within their existing business.