Types of diversification strategy we talked about the growth strategies before, and now we will explain the type of the second growth strategy that is called diversification strategy let's start to explain the 4 types of this strategy.
Diversification strategy types:
1- Horizontal diversification strategy
Means you brand or company make a new product to the same customers to share the Market with other companies which provide the new product you are introducing or will start to introduce.
Example: Now ZOOM application is going to add a new product do you know that, they will provide an E-mail platform and Calendar to assist users their work, time and messages in one application which will make Zoom take a part of the market from Google, Yahoo and other websites which provide Emails.
Also, horizontal diversification strategy have to types concentric diversification and concentric diversification.
Concentric Diversification
Concentric Diversification is a strategy should include the horizontal diversification strategy it's related, because your company in this strategy you are including a new product or service which included in your main product or service, let's explain if you are producing an electric parts for the cars, and you opened a new place to provide the installation your product to the customer car.
Example: iPhone when they produced air pods or google when they added google trends it's leaned on data from the search engine and giving a good service to the users of writing blog or YouTubers.
Conglomerate Diversification
this strategy related to horizontal diversification strategy there for you are starting to introduce a new product doesn't relate to your old product that you are selling or producing, and start to distribute in a new market to a new customer which give you a chance to introduce your previous product to the new customer's which are interested in your second product or service, to merge the customers from different market to your brand or company.
2- Vertical diversification strategy
there are two kind of vertical diversification strategy backward integration and forward integration.
Backward integration
you service or product in your company you need to start introducing a new related product like a company which is providing the Fuel to car (fuel station) and added a new product in the same service as gas to the big trucks.
This strategy is good to increase your customers in the market because there is some is looking to a complementary good of the product that you are introducing.
Example: iPhone when they added to their production chargers it's a backward integration in vertical diversification strategy.
Forward integration
When you are a manufacture which is to produce clothes you are selling to retailers, when you start to sell the final customer and open to another channel of distribution it called forward integration in vertical strategy.
Example: iPhone opened their store to sell their products direct to customers.
the benefits of this strategy that it give you a chance to give the customer a new relation to care about customer service and selling in the main time to reduce cost of operation and assets of the customer service office.
3-Definsive Diversification
this strategy the companies may use to stay competitive in the market and that's because their product is not selling good or losing instead of competitors, so they start to diversification their product or market to defend the brand from losing.
4-Offensive Diversification
offensive diversification when the company or the brand decided to seeking grow its profit and market through diversifying their product or service to accomplish more customers and increase the awareness of the brand in more than one product and market.
