UNIVERSITY OF IMMACULATE CONCEPTION

Jacinto St., Davao City

Marianne Dela Cruz Prof. Presentacion Acosta

Student Professor
Subject: 313 – Business Policy and Decision Making

BRIEFER
Topic: Business Level Strategy: Creating Value Through
Diversification

Summary

Diversification, a crucial investment strategy, involves spreading investments across various

industries and financial instruments to mitigate risks. In manufacturing, diversification minimizes
sector-specific downturn risks, increases return on investment (ROI), and broadens product and
service alternatives. Reasons for diversification include reducing industry collapse risks,
enhancing company image and profitability, staying competitive, pivoting during economic
uncertainty, and utilizing excess cash flows.

There are four types of diversification methods: Horizontal, adding new products or services to
the current market; Concentric, adding similar products or services to the existing business;
Conglomerate, introducing new products unrelated to the current business; and Vertical, moving
up or down the supply chain.

Diversification strategies include Related Diversification, entering a new industry similar to the
current demand, and Unrelated Diversification, penetrating an entirely new industry. The
business-level strategy encompasses Corporate-Level Strategy, Business-Level Strategy, and
Functional-Level Strategy. Business Level Strategy focuses on creating value for customers,
achieving a sustainable competitive advantage, and succeeding in the marketplace.

Importance of Business-Level Strategy lies in differentiation, effective resource allocation, and

building sustainable competitive advantage. Differentiation strategies involve attracting
customers through lower prices or distinct products. Cost Leadership Strategy aims to be the
least expensive producer, while Differentiation Strategy focuses on offering superior or distinct
products. Focused Differentiation Strategy concentrates on delivering unique products to a
specific market segment.

Integrated Strategy, combining cost leadership and differentiation, enhances flexibility and
adaptability. The implementation process involves conducting market analysis, evaluating
internal capabilities, defining company goals, assessing risk tolerance, and regularly reviewing
and aligning the strategy with strengths and customer needs.

Personal Insight/Lesson Learned

Relating to the previous chapter scenario about our assisted MSMEs Infinity O-Shop
Business Supplies aligning with the topic of Business Level Strategy, emphasizing the
importance of creating value through diversification. Infinity O-Shop initially ventured
into the market as a cleaning products supplier during the COVID-19 pandemic but
faced losses. In response to heightened travel restrictions and customer needs, the
business diversified and expanded its operations to supply a wider range of products,
including baking essentials, powdered drinks, food packaging, PET bottles, and more.

The diversification strategy employed by Infinity O-Shop reflects elements of both

Concentric Diversification, as it added products related to the existing business, and
Conglomerate Diversification, introducing new products unrelated to its initial focus. This
strategic move allowed the business to pivot during economic uncertainty and cater to
the evolving demands of its target market, showcasing adaptability and responsiveness.

The business's tagline, "Working for you," reinforces the commitment to providing
products that fit customer requirements and needs. This customer-centric approach
resonates with the differentiation strategy outlined in Business Level Strategy, focusing
on offering distinct products to attract and retain customers.

Moreover, Infinity O-Shop's endeavor to be a one-stop shop aligns with the concept of
providing a variety of products to create value for customers. This approach
corresponds to the broader market scope mentioned in the Business-Level Strategy,
where businesses can choose to target a broad market by offering products to a diverse
customer base.
In essence, Infinity O-Shop's scenario illustrates the practical application of
diversification and business-level strategies to navigate challenges, meet customer
demands, and achieve sustainable growth in a dynamic business environment.