What are the primary benefits and risks associated with related Coursework

What are the primary benefits and risks associated with related diversification - Coursework Example Related diversification also helps in spreading the risk. This is done by manufacturing similar good or those that are related to them, therefore leading to similar services being offered, or penetrating new markets. When a company can use existing resources and experience, it gets to enjoy a better quality due to the company producing part of the raw material or components for its main production line. This eventually leads to lower prices and eventually widening the market. It also assures the company of regular supplies. This in turn puts the company in a strategic position, therefore, less competition. Another benefit is that strategic goals can be combined. When everyone has the same objective, then there is the possibility of achieving even more and, as a result, opportunities resulting throughout the production can be shared and fully utilized. It also an opportunity to a firm to share technologies, acquired skills and experiences that the companies have. They are also able to enjoy the same distribution channels, similar techniques of running a business and adapting resources. It also leads to economies of scale being achieved through the elimination of different types of expenditure when more than one business activity is developed in a common company (Corporate Strategy). The risks associated with related diversification include changing conditions, failure to predict future success because there may be divestment due to changing situations. If diversification is done for wrong reasons, it could lead to failure of creating value. The company also faces a risk of reduction in

Management principles Essay Example | Topics and Well Written Essays - 500 words

Management principles - Essay Example developed, it is important to underscore - for the benefit of the managers at MH company - that the global pharmaceutical market continues to grow despite the global financial downturn and that from 1998 to 2007, the global sales have more than doubled. (Griffin, p. 297) As the leader in the industry, there is a great demand for US pharmaceutical products and that international expansion is inevitable. As the business begins to grow, the international market for MH Pharmaceutical’s wheelchairs become more complex and diverse. The importance of a coherent strategy to address this challenge implemented by an equally capable international management division is pivotal to the success and growth of the company. One logical strategy in approaching international expansion is entering into a joint venture with local partners. The local partners could allow entry to a restricted market and at the same time draw on local expertise, capital and labor. This is particular helpful considering the fact that there are differences in the way countries use pharmaceutical products and differences in the regulation by the different governments. Social, cultural and political variables are all coming into play in specific locations for target operations. And so, operating with partners who are familiar with a country’s markets, suppliers, infrastructure, government regulations and customers is invaluable in the cost reduction and the speed and ease of setting up a local operation for marketing and sales. The disadvantage of this strategy is that it is time-consuming, with all the negotiations taking place. In addition, partnership may not also be viable MC company if it is concerned with the expenditures because setting up operations – marketing, sales and distribution - for this option can be costly. If the MH Company management rejects the previous strategy, then it could tap the wonders of technology to reach out to its target market across the globe. The increase of