San Jose, Kyla Mae H.

191-0239
BSA 3B Prof. D. F.
Fortes

ASSESSMENT TASK 5
1. What conditions, externally and internally, would be desired/necessary for a firm to
diversify? Explain your answer.

- To begin with, diversity makes sense only if it provides greater value to shareholders than
individual shareholders may receive. Diversification, on the other hand, is an interesting
choice for a company operating in an unfavorable industry. To consider diversification, a
business must be well-managed and financially sound on the inside.

2. Could a firm simultaneously pursue focus, differentiation, and cost leadership? Should
firms do that? Discuss.

- For me, yes, it's possible, especially in a multi-divisional company where different divisions
have various approaches. Differentiation and focus methods are likely to increase costs,
therefore while these two techniques might be combined, adding cost leadership would be
challenging. One reason to avoid combining the three generic tactics inside a single
division/segment is that businesses attempt to maximize customer attractiveness, awareness,
and consistency for certain brands.

3. What are the major advantages and disadvantages of diversification?

- Diversification has several advantages, including the ability to distribute risks and resources
across multiple areas, the ability to seek special possibilities in a variety of areas, and the
ability to balance counter-seasonal sales throughout the year. On the other hand,
Diversification has multiple downsides:  it is dangerous, costly, it needs great management
abilities, and it demands a complex control system.