GROUP 8

HORIZONTAL
DIVERSIFICATION
HORIZONTAL DIVERSIFICATION
• Is generally perceived as a strategy that evolves around the idea of
seeking ownership or increased control over the direct and indirect
competitors of the business.
• Horizontal Diversification is one of the most popular growth
strategies. In this, a firm adds more products that may appeal to the
firm’s existing clients. The new product (or products) that a
company adds is not directly related to its current products. Or, we
can say that a company adds new products to its product lines that
are not the same as other products in the line. This way, the new
products also appeal to the company’s existing customers.
ADVANTAGE OF HORIZONTAL
DIVERSIFICATION
The advantage of horizontal diversification is that you can leverage your
existing resources, skills, and reputation, and attract more customers to your
business. The downside is that you might face more competition, cannibalize
your own sales, or dilute your brand identity.

This type of diversification supports several various optimizations by

encouraging a company to come up with products that fit the market. It helps
in increasing the skill set of the employees as they now are responsible for
overseeing two or more products. Such a strategy gives companies greater
price control.
DISADVANTAGE OF
HORIZONTAL DIVERSIFICATION
The downside is that you might face more competition, cannibalize
your own sales, or dilute your brand identity.
A company gets more susceptible to regulatory changes.
If an existing customer is not satisfied or there is some dispute
with the new product, they may also stop buying the core product.
This diversification strategy does not focus on adding new
customers.
EXAMPLE OF HORIZONTAL
DIVERSIFICATION
• Apple is a great example of this type of diversification.
Initially, the company only offered computers, but it later
diversified into iPod and iPhone. Now, the company also
offers Apple Watch, Apple TV, and many other hardware and
software products.
EXAMPLE OF HORIZONTAL DIVERSIFICATION
A food and beverage company sells a variety of grocery items in
different lines, but its best-selling products seem to come from its line
of dairy-free milk beverages, which includes beverages made from soy,
oat and almond milk. The company determines that while their dairy-
free beverage line has increased in sales, the rest of their dairy products
made with dairy milk produce lower sales numbers. Therefore, the
company decides to add dairy-free cheese to their line of dairy-free
products so that the line offers more products than only beverages.
This is also an example of horizontal diversification, as cheese is a
different product than milk, but customers who purchase dairy-free
milk might also choose to purchase dairy-free cheese.
GROUP MEMBERS
Daisylyn Q. Dayaon
Princess Dianne Delen
Kim Patrick Grajo
Dexter Angelo Inciso