DIVERSIFICATION STRATEGIES

Diversification Strategies

Abstract

In this paper we try focus on two large businesses. The paper Compare and contrast the two businesses-core business, their size, financials, global presence, use of e-business (marketing, sales, etc.). The paper also provides their outcomes (one successful, one unsuccessful). It also, Analyze the three primary reasons for the different outcomes. Finally paper, recommend two actions the unsuccessful one could have made to make their diversification venture successful

Diversification Strategies

Compare and contrast the two businesses-core business, their size, financials, global presence, use of e-business (marketing, sales, etc.).

Here we are going to take two large organizations that are globally recognized. The basic purpose of taking these two organizations is to compare and contrast their business core business, size, global presence etc. The first globally recognized organization, which we are taking, is ASDA. It was founded in 1949 and is currently the second largest supermarket in the UK for sales. ASDA was bought by the American multinational Wal-mart in 1999 and has 243 supermarkets and hypermarkets where 37 ASDA Wart also sell clothing, appliances, CDs, DVDs, stationery and much more. Prices at ASDA are quite economical, especially for food consumption as bread and vegetables daily.

 

2002

2003

2004

2005

2006

2007

2008

Profitability

6%

5.70%

5.90%

2.90%

6%

8%

4.40%

Profitability of ASDA is not constant; it is either increasing or decreasing. From 2002 to 2003, it has decreased from 6% to 5.70%, whereas, from 2003 to 2004 it has increased from 5.70% to 5.90%. In 2005, it decreased with a marginal rate i.e. from 5.90% it decreased to 2.90%, but again in 2006 the company faced the marginal growth of 6% in 2006 and 8% in 2008.Whereas, Tesco is the other well renowned company in the world. Tesco is a significant international retailer. As a global business, the company perceives itself as having a vital role to play in helping to minimize its environmental impacts.

Although based in the United Kingdom, Tesco PLC has developed into an international grocery and general merchandising chain, employing 440,000 staff worldwide and with sales exceeding £59 billion (in the year ending February 2009). Operating income exceeded £3 billion. These figures make Tesco the largest British retailer in terms of both combined sales and domestic market share, and the third largest in the world after Wal-Mart (United States) and Carrefour (France). It is claimed that £1 in every £7 of UK retail sales goes the way of Tesco.

 

2002

2003

2004

2005

2006

2007

2008

Profitability

4%

6.70%

8.90%

7.90%

15%

25%

30.10%

Compare and contrast their outcomes (one successful, one unsuccessful).

Tesco has a very high market share. Tesco almost captures 13% of the retail market industry of UK. It is the main strength of Tesco that makes it dominant in front of its competitors. Insurance is also strength of Tesco. Tesco's insurance has reached one million in the recent years. This is also a positive point for the growth of Tesco. Tesco is that it is the world's number one online retail market, which is also strength of Tesco. The online sales of Tesco have reached over £577 million (Chandler, 2005). Tesco's reliance upon the UK market is considered to be its main ...