Portfolio Diversification Assignment
Portfolio Diversification Assignment
Portfolio Diversification Assignment
ORDER NOW FOR AN ORIGINAL PAPER ASSIGNMENT: Portfolio Diversification Assignment
Portfolio Diversification Assignment: Write a respond adding to the arguments below or disagree with it and back your point up.
Statement 1- 200 words
Statement 2- 200 words
Statement 3- 200
Statement 1
Three opportunities that share a sound basis for diversification or through vertical integration are found in three activities; market-related, operating-related, and management. These three areas of opportunities have been exploited by many different companies across virtually all industries. There are essentially two types of diversification and they are related and unrelated. According to our readings this week “Related diversification occurs when a firm moves into a new industry that has important similarities with the firm’s existing industry or industries” and unrelated diversification “which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries” (Lesson 5).
One company I chose that successfully used related diversification across its marketing, operations, and management is Starbucks. In 1971 Starbucks began selling roasted coffee to restaurants and espresso bars. From there the director or retail operations and marketing, Howard Schultz, convinced the current leadership to open the first coffee shop in 1985. From then until now Starbucks has continually sought ways to improve their position and that has been through diversification. In 1995, the first Frappuccino was introduced and three years later Starbucks products were offered in grocery stores around the country. At the same time the coffee house menu continued to expand. In 2013 they purchased a bakery operation that the firm acquired for $100 million and Evolution Harvest granola bars for $30 million dollars. This gave Starbucks the ability to add food items to the menu. An interesting aspect of this company is that the model they follow for expansion goes hand in hand with expanding certain aspects of vertical integration from coffee bean and bakery ingredients to a finished product either in the grocery store or one of their many coffee houses (Starbucks, 2018).
Another company I will highlight has done an excellent job using management opportunities in growing their brand and that is Tractor Supply Company. This company began in 1932 as a tractor parts business and if you look at what they offer today on their website, it is a little overwhelming. Since 1932 they built such a diversified portfolio which has kept them on track to earn over seven billion in revenue last year. They hold equities in not only tractors but “Tractor Supply lists five major product categories. The livestock and pet products, hardware, tools, truck and towing products, seasonal products such as lawn and garden equipment, gifts and toys, clothing and footwear, and agricultural products” (US SEC, 2017). They have managed to become the leader in the ranch and farm industry and offer a one stop shop, a sort Walmart for ranchers. In a sense this is an example of how they integrated related and unrelated diversity along with leveraging management into their strategic model laying the ground work for success.
Portfolio Diversification Assignment Statement 2
According to the University of Minnesota (n.d.) there are several kinds of integration, including backward vertical integration, forward integration, or related diversification. As a whole, vertical integration is the process in which firms enter another part of their value chain (University of Minnesota, n.d.). In backwards vertical integration, a firm will begin participating in a part of the process that is farther away from the customer. This is typically quite lucrative for firms, as they have the potential to control more part of the process and work on their competitive advantage (Amedeo, 2018). Additionally, this can lower costs, by keeping more steps of the chain in house. For example, Target produces several store brands, such as Archer Farms, Up and Up, and others. Since target is a retailer who has vertically integrated into manufacturing, this is considered backwards integration.
Forward vertical integration, as expected, is the opposite of backwards vertical integration. In this case, the firm becomes one or several steps closer to the consumer on the supply chain. For example, Eckert’s a southern Illinois based apple orchard used to sell only wholesale to retailers. However, in recent years, Eckert’s has opened several stores, selling directly to customers, as well as a restaurant. By becoming the retailer, the firm has moved a step closer to the consumer, making this forward vertical integration. The benefits are similar; firms will have more control over the process, reduce costs, and enhance their competitive advantage (University of Minnesota, n.d.).
Another kind of movement is related diversification. In related diversification, a firm moves into an industry that is different than their current one, but has some similarities (University of Minnesota, n.d.). As cited by the text, Disney’s acquisition of ABC was considered related diversification, since movie and television industries are different, but related (University of Minnesota, n.d.).
While any kind of diversification is not risk free, there are quite a few benefits that should be considered. Moving forward, backwards, or horizontally to a different industry all together, may help a firm diversify and expand. On the other hand, there is also a possibility that some firms do not have the resources or preparations in place to expand in these kinds of ways.
Statement 3- Are you ready for interviewing time? Let us start it early for you and the rest of the class. Pretend for a moment that you have just finished your degree and there is a great job (and I mean $50K more than you are making now a year) advertised with Amazon.com or perhaps with one of the Trump businesses. They want you to come to the interview with ideas for some possible acquisitions that could be beneficial to them. The person with the best suggestions — will get the job and opportunity to work with their own time to make these acquisitions work. Ready? What might you suggest?
Assignment Policies
Description
Class-
Please read all of the information about the assignments below:
FORMAT FOR ALL ASSIGNMENTS
The assignments are to be done in Microsoft Word with Times New Roman 12- point font. Each assignment should use the modified APA 6th edition format. The assignment templates are set up in this modified format. The reference page should be in the APA format for every reference. The word requirement for the assignments are specifically stated in the guidelines of the assignment. The word count is from the first word of the introductory paragraph to the last word of the conclusion paragraph. FYI.
REFERENCE REQUIREMENTS
1- There should be a cited reference for each section of a paper as there are conclusion statements in each section (to meet the grading criteria) so the conclusion should be supported by a reference as the assignments are evidence-based research, clinical papers.
2- Word Count- The word count is done from the first word of the introductory paragraph to the last word of the conclusion. The word count must be within the minimum and maximum word limit stated in the assignment instructions. A 10% – point reduction will be made in the total points for the assignment.
Week 1 and 5 assignments should have SIX studies. Week 5 assignment is a compilation of sections from the week 1, 2 & 3 assignments.
Weeks 2 and 3 need to have at least THREE studies in the form of research studies. Please make sure that you look at the instructions for the assignment as well as the grading rubric. I have also provided templates for ALL assignments. It is in your best interest to use these as it will guide you so that you do not make common formatting errors.
APA FORMAT FOR ASSIGNMENT
Please utilize the resources in the STUDENT SUCCESS CENTER if you have difficulty with APA 6th Edition format, grammar, sentence structure, punctuation or tense structure.
SUBMISSION OF ASSIGNMENTS
Always submit the assignment in the drop box for that assignment. I cannot accept any assignment as an attachment to an email sent to my college email. Attaching it to a posting to the Questions to Instructor Forum or the Individual Forum is also not accepted.
I cannot grade any assignment unless it is placed into the drop box by the student per university policy.
Turn-It-In / Lopes Write
This is to be used for the assignments for these three weeks (2, 3 & 5) and it is NOT required for Week 1. All assignments will be placed through Turn It In first and then submitted in the drop box on the course shell. No assignments will be accepted as attachments to emails as this is not the university policy.
Grading Rubric-
The rubric for each assignment is found in the upper right- hand corner of the assignment page under the Forum Tab. Compare the requirements of the rubric with your paper prior to submission into the drop box so you will receive full credit for all graded criteria of the paper.
Late Assignment-
Any assignment that is late will have 10% deducted each day it is late. This is a 5- week class. It is imperative that you ask for help if you are having difficulty with an assignment.
You need to contact me as soon as possible if an assignment will be late prior to the submission deadline.
