Essay on Diversification Strategy

Words: 1412
Pages: 6
Open Document
Assignment 2: Diversification Strategy The purpose of this paper is to compare and contrast two companies; One successful and one unsuccessful. The two companies chosen for this purpose is General Motors (unsuccessful) and Toyota Motor Corporation (successful). The content of this paper will analyze, compare and contrast the outcomes, and recommend actions that General Motors could have made to make their diversification venture more successful. The analysis will include the company’s core business, the size of the companies, and the 2009 financial statements of the companies, the company’s global presence, and their use of e-business. The analysis will also contain the primary reason for the different outcomes.
History of General …show more content…
Toyota has since made the Corolla, Camry, Toyota trucks, Scion, and Lexus. Toyota became synonymous for its creation of the first gas/electric hybrid Prius in December 2002 stating to the public, “We built a car for the 21st century.” As Toyota moved into the decade
2000, it continued its vision as “The relentless pursuit of perfection” by offering buyers more luxury vehicles and hybrids to choose from (Toyota Motor Corporation, 2011).
General Motors versus Toyota Motor Corporation In December 2008, General Motors and two other auto companies requested bailout funds from the government to avoid bankruptcy. General Motors requested funds totaled $34 billion from the government, $18 billion in loans, and General Motors received another $6 billion from GMAC (Amadeo, 2011). The government complied with General Motors’ request for funding and gave the company bailout funds in January 2009. During 2009, General Motors’ total revenue was $104,589.0 billion and its gross profit was -$8,079 (General Motors Co., 2011). In March 2009, the Federal Government gained control of General Motors and during this takeover the Federal Government terminated the Chief Executive Officer Rick Wagoner before releasing funds to keep the company afloat. The government also nationalized General Motors to for the company to become more competitive (Amadeo, 2011). In 2007,
Show More

Related Documents: Essay on Diversification Strategy

Essay on Pepsico's Diversification Strategy

Abstract PepsiCo has built a strong empire that has given it dominance throughout much of the world as a provider or snack foods and beverages. As it has worked to build its market share, PepsiCo has made many key decisions – some positive and some negative. It has also gone through a number of changes including the acquisition and subsequent divestiture of several fast food chains. This paper focuses on the process that all companies should follow to help determine whether the industry they…

Words 1223 - Pages 5

Evaluate Amazon’s Diversification Strategy. Essay

Diversification in E- Commerce [pic] Diana Reyes – 27828 Introduction Economies of scope and synergies in business operations are consequences of diversification strategies. It is possible to classify companies according to the type of diversification strategy selected. Unrelated diversifiers are companies that diversify across industry, while related diversifiers are firms that diversify within the industry (Kim, Hwang and Burgers 1989). Companies pursuing related diversification over…

Words 4065 - Pages 17

To what extent is diversification the best strategy to achieve profitable growth? Essay

deal. Alcon is a producer of eye care products such as contact lenses. Google has diversified by investing £124m in a wind power business. To what extent is diversification the best strategy to achieve profitable growth? Justify your answer with reference to Novartis, Google and/ or other organisations that you know. (40 marks) Diversification - Practice under which a firm enters an industry or market different from its core business. Growth – The process of improving some measure of an enterprise’s…

Words 1211 - Pages 5

Essay on Business Strategy

Diversification Strategy OUTLINE • • • • • • Introduction: The Basic Issues The Trend over Time Motives for Diversification - Growth and risk spreading - Diversification and Shareholder Value: Porter’s Three Essential Tests. Competitive Advantage from Diversification Diversification and Performance: Empirical Evidence Relatedness in Diversification Objectives • Define corporate strategy, describe some of the reasons why firms diversify, identify and describe different types…

Words 1802 - Pages 8

Essay about Strategic Management and Corporate Level Strategy

Corporate Level Strategy • Team exercise Business Policy and Strategy – Feb. 23, 2015 Corporate Level Strategy • Business Level Strategy: How to compete in a single product market • Corporate Level Strategy: Where to compete alongside three dimensions: – Industry value chain: In which stage(s) of the value chain should the firm be active in – Range of products and services: What are the products and services to offer – Where to compete: geography Business Policy and Strategy – Feb. 23, 2015…

Words 515 - Pages 3

Haier Case Study Essay

Haier Case Study 1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy. The single and dominant business strategy, which denote relatively low levels of diversification, more fully diversified firms are classified into related and unrelated categories. A firm is related through its diversification when there are several links between its business units; for example, units may share products or services, technologies, or distribution…

Words 1325 - Pages 6

Essay about MAN30055 review

MAN30055 International Business Strategy Revision Dr Xiaoying Li Today’s agenda • Overview of the key topics • The exam Lecture 1: define strategy • What is strategy? • What is strategy? • Strategy as plan • Strategy as action • Strategy as theory: strategy as integration • The four fundamental questions in strategy • Why do firms differ? • How do firms behave? • What determines the scope of the firm? • What determines the international success or failure of firms? Lecture 2: industry-based…

Words 704 - Pages 3

Corporate Level Strategy of Apple Essay example

CORPORATE LEVEL STRATEGY OF APPLE COMPUTER INC. Low level of diversification (1976-1996) To examine what strategies have been used by Apple, we divided the period into two ages. The first age is in between 1976 until 1996 were we can observe that all the products sold by Apple were computer related. They started with Apple 1 and continuously developed their products up until the evolutionary of Macintosh. However, their development restrained only to computers, chips and software which indicates…

Words 1093 - Pages 5

Wessfarmers: Product Transversification Strategies

concrete for the structural frame of buildings. Product diversification involves addition of new products to existing products either being manufactured or being marketed. Expansion of the existing product line with related products is one such method adopted by many businesses. Adding tooth brushes to tooth paste or tooth powders or mouthwash under the same brand or under different brands aimed at different segments is one way of diversification. These are either brand extensions or product extensions…

Words 1782 - Pages 8

Management: Strategic Management and Competitive Advantage Essay

the necessary changes, and measuring the outcomes. Central objective of strategic management is to create differentiation between the organization and its competitors. Modern approach to strategy formulation: combining emergent and planned approaches in the development of strategy. Emergent strategies: strategies resulting from decisions made by managers in the organization in response to external events or conditions within the organization. Strategic intent: focuses on how the organization compete…

Words 1724 - Pages 7