Bus 508 Diversification Strategies

Running head: DIVERSIFICATION STRATEGIES 1

Diversification Strategies

Roger Williams

Strayer University

The Business Enterprise 508

Dr. Jerome Newman

25 October 2011

DIVERSIFICATION STRATEGIES 2

Compare and contrast the two businesses—core business, their size, financials, global presence, use of e-business (marketing, sales, etc.).

A diversified company is one that has multiple, unrelated businesses. Unrelated businesses are those which (1) require unique management expertise, (2) have different end customers and (3) produce different products or provide different services. One of the benefits of being a diversified company is that it buffers a company from dramatic fluctuations in any one industry sector. However, this model is also less likely to enable stockholders to realize significant gains or losses because it is not singularly focused on one business. Investopedia (2011) states that companies may become diversified by entering into new businesses on its own, by merging with another company or by acquiring a company operating in another field or service sector. One of the challenges facing diversified companies is the need to maintain a strong strategic focus to produce solid financial returns for shareholders instead of diluting corporate value through ill-conceived acquisitions or expansions. 

Walmart and Kmart; along with Target are the three primary retail giants in the United States. This paper will compare and contrast Walmart and Kmart Corporations. According to Walmart’s website:

“Walmart serves customers and members more than 200 million times per week at more than 9759 retail units under 60 different banners in 28 countries. With fiscal year 2010 sales of $405billion, Walmart is the world’s largest private employer; employing 2.1 million associates worldwide. A leader in sustainability, corporate philanthropy and employment opportunity, Walmart...