PRO OR AGAINST

“Diversification strategy can do more harm than good to company”

Diversification refers to a strategic direction that takes companies into other products and/or
markets by mean of either internal or external development. In terms of corporate marketing,
business diversification is the strategy to increase profits by selling new products in new
markets may it be Related or Unrelated. As with all strategies, diversification in business has
advantages and disadvantages and the administration can use these for different purposes.
These advantages and disadvantages could have a huge impact to a company; may it be in a
positive or negative way. However, I believe that Diversification Strategy is a huge opportunity
for any companies and businesses that shouldn’t be taken granted for.

First and foremost, companies diversify to achieve greater profitability through expanding their
reach and appeal, with this, they are able to explore new revenues for sales, and in turn, have
the potential to vastly increase their profits. Aside from that, diversification can also allow
companies and businesses to minimize the risk of an industry downturn, it can also boost brand
image and lastly, it can also be used as a defense mechanism to protect a company from strong
competition. Diversification Strategy could serve as an “Armor” to any company as long as they
can assure that they are capable on taking risk with the said strategy. It could help companies to
achieve one of its main goals, which is to increase profit so that they can thrive for the following
years of success. Which is why, I am against the statement “Diversification can do more harm
than good to a company”