Session 3

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Core competence is what you are best at (most reliable route towards growth

It is also a long term competitive strategy where unrelated non profitable businesses are sold off and
company is restructured around fewer and fitter businesses

Diversification as a strategy: moving away from core is diversification. It can be related/unrelated

Related diversification case studies- success of Amul, Cadbury ice-cream called dollops , Britannia as
a milk brand

Unrelated diversification – success story reliance, failure story Raymond, cement steel and
petrochemical diversification did not succeed

Success and failure is always case specific and reasons can be different. As a student of this subject
we need to find out why companies diversifyand we need to understand the following dimensions :

Diversify fact: company ha no other alternative but to diversify. Ref case studies – ITC, Manikchand,
Sanjay Gorawad Star Group and DS Group

On the other hand times of india and india today are egs of moving with time as definition of media
had changed

Fiction: it is an illusion or a non reality or wrongly placed confidence that brand extensions will
always succeed

Diversifriction:

 Friction at market place


 Friction for sources and
 Friction because of family disputes
Diversifame

Diversifad: herd mentality

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