Three growth strategies that the company can pursue are market development, diversification, and product development. Market penetration involves increasing the market share of the company in its domestic market. The firm can increase its market share by offering its customers a better value proposition…
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The Importance of Diversification
Diversification involves adding new products from different industries (Investopedia, 2013). For instance Tuscan Treasures can add to its product line the sale of vacation packages and cruise trips. In 2011 the global tourism industry generated revenues exceeding one trillion dollars (Berwyn, 2012). The use of a diversification strategy lowers the business risk of the company, while at the same time increasing its income streams. The third growth strategy the firm must use is product development. The company can introduce its own line of decorative products. These products are going to be unique and different because they will be made using banana ply paper as the raw material. Banana ply paper is a renewable source that comes from the trunks of the banana trees. The owner of the patent is the company Papyrus Australia. This company offers licensing agreement to companies interested in sponsoring its product to become business partners. Decorative products are a complimentary product to furniture that will increase the overall revenues of the firm. It is important to properly market the new green product through different marketing channels such as the internet, television, satellite radio, and mobile technology.
The company is suffering from profitability problems. There are a variety of factors that could be causing the firm’s inability to generate profits. Profitability issues typically involve either declining sales or increasing costs. The company’s sales must be sufficient to cover all fixed and variable costs. If the expenses of the company exceed its revenues the company will incur in net losses. The firm must determine its breakeven cost to ensure the sales projections of the company exceed that number. A way to boost the sales of the company is by investing in advertising. The poor profitability of the company may be associated with high costs. The company must perform a cost analysis to evaluate the payroll obligations of the company. The analysis should provide information regarding whether the company is overpaying its employees and to determine if the firm could operate with a smaller workforce. Investment in new technologies can increase the efficiency and profitability of the business. New technology can also reduce labor costs. A second element of the cost structure of the company that must be evaluated is its materials costs. The market must be analyzed to determine if a suitable supplier of Italian furniture is available that offers lower prices than the firm’s current suppliers. Lowering materials costs will reduce the cost structure of the firm and raise profitability. Another reason the profitability of the company may be suffering is a lack of productivity. Low employee morale or a lack of motivation can hinder the productivity of the workers. The managers of the company are responsible for motivating the staff. A way to increase the motivation of the workers is by offering intrinsic and extrinsic rewards. An example of an intrinsic reward is a manager telling a subordinate they did a great job during a work day. Offering positive reinforcement can increase the confidence of the workers. Giving financing incentives such as a Christmas bonus is an example of an extrinsic reward. Part C The downsizing initiative of the firm must be well planned and executed in an effective manner. The company must keep the information about the strategy internal to avoid hurting
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To maximize the benefits of diversifying investments one must be more selective in the process of portfolio diversification. The goal of diversification is to maximize the chances of a positive return and by investing in diverse areas where their reactions would be different for the same event or news.
3M is present across the world in six diversified business segments. The businesses in which 3M operates are Health Care, Display and Graphics, Industrial and Transportation, Consumer and Office, Electro and Communications, as well as Safety, Security and Protection Services.
However, even much earlier, the article of Fisher (1973) confirmed that the theory has been very alive and was even the core of Fisher’s (1973) contributions to the theory. As recent or late as 2005, the article of Leibowitz and Bova contributed to modern portfolio theory in the area of “allocation betas.” This confirms that modern portfolio theory continues to be the benchmark theory of many analysts.
Domestic policies in Alberta present a substantial hindrance for economic diversification in the province. These policies ensure that limited access to foreign markets, increasing costs, and inhibited opportunities for consumers and producers, present a challenge to prospective business start ups in the province.
It relates to overall development which is categorized into a very broad context. However, the term diversity plays a decisive part in structuring the overall design of an organization. Practicing diversity in a particular work environment can lead towards increased productivity which can trigger creativity in the work pattern of the employees by a greater level.
In simple words diversification of funds help to reduce market risks that has four strong building blocks of an investment portfolio known as Cash, Fixed Interests, Property and Shares. Financial professionals generally agree there are four broad classes of assets such as stocks, fixed income or bonds, cash equivalents and other tangible assets such as real estate.
Gradually the brand Corona expanded to 150 countries worldwide with the strength of quality and image. Modelo acquired some other beer businesses in order to achieve consolidation in the industry and compete with the rivals who were very big. The
According to the paper, the company has grown at a good pace over the last few decades and has continued on its journey to be the leader in the global market in the field of computer software developing and has got the maximum market share. The company has its vision of setting up a computer in every home across the globe.
ough various variables including their productivity levels, the level of collaboration and trust between members and how well they follow their leader’s instructions. Effective teams are those that operate with clarified goals and have been structured in a way that the very
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