Companies Diversification

Companies adopt vertical or horizontal strategies in order to spruce up and transform business operations. The horizontal growth approach encompasses expanding a company's business activities into various geographic areas. According to Moreira et al., a horizontal growth strategy is responsible for heightening the company's scale of products and services to the current market (711). Moreover, it involves the acquisition of a competitor corporation that resembles in terms of product value or services offered. The model strives to ensure proper protection of the firm's targets, such as market and product value, from its competitors. A perfect example of a horizontal growth strategy is the acquisition of Instagram and WhatsApp by Facebook. A vertical growth strategy occurs when a company takes control over a particular stage in producing or even distributing a product. This approach is undertaken in order to consolidate a firm's position among competitors. The nature and performance of Netflix is a typical example of vertical strategy. This company started as a DVD firm but later ventured into such fields as showing licensed movies from various studios, video filming, as well as online streaming.

On the other hand, concentric diversification entails the addition of new products to properly established product lines in the quest to attract new investors and customers. Dhir and Swati acclaim that concentric strategy is commonly known as convergent diversification because a company buys another division similar to its present product line (589). An example of concentric diversification is Anheuser-Busch's diversification into a firm specializing in snack food in its quest to complement the initial line of beers. Although products are not alike, they have a common thread linking them together.