Corporate-Level Strategy: Creating Value through Diversification

Generated by DALL-E

Corporate-level strategy defines how businesses within a corporation interact and align to achieve organizational objectives. Diversification is one of the most impactful strategies corporations employ to create enormous value. When done right, diversification is like throwing a party where everyone contributes to the fun; but if done wrong, it can feel like inviting vampires to a picnic.

What Is Diversification in Corporate-Level Strategy?

Diversification refers to a corporation’s efforts to expand its business portfolio by entering new markets or industries, leveraging existing resources, or developing new competencies. It’s a strategy used to reduce risk, enhance growth, and capitalize on market opportunities.

There are two main types of diversification:

1. Related Diversification: Staying within a familiar playground by leveraging existing resources, skills, or markets. Think Disney expanding from animated movies into theme parks — it’s all about keeping the magic alive. Another example is Apple’s move from computers to smartphones to wearables, which shows how related diversification can create a seamless ecosystem — AirPods, iPhones, and Macs not only work together but make you feel like leaving the ecosystem is as…