The Importance Of Diverificatio

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RUNNING HEAD: The Importance of The Importance of Diversification Assignment January 27, 2012 The Importance of Diversification 1 Table of Contents 1. Compare and contrast the two businesses 2. Compare and contrast their outcomes 3. Analyze the three primary reasons for the different outcome 4. Recommend two actions the unsuccessful one could have made to make diversification 5. Three quality resources form the last five years 6. Conclusion The Importance of Diversification 2 Diversification is important for any organization. This can be attributed to the fact that diversification reduces the risks and maximizes return to the organization. Diversification can be successful or unsuccessful in any organization. Walmart has a successful diversification. However, Kmart was unsuccessful until the merger with Sears than it became successful. Diversification is a form of growth strategy. Growth strategies involve a great increase in performance objectives usually sales of market share that contribute beyond past levels of performance. Most organizations pursue one or more types of growth strategies. One primary reason is the view held by many investors and executives is that “bigger is better” (reference for business. 2004). A measure of performance is the growth of sales. An increase in sales satisfies people regardless of rather profits decline or remains stable. Walmart was built by Sam Walton, which is the most successful and profitable corporation in America. Walmart quietly captioned a retail market by customers and virtually ignored by competitors. However, Walmart strategy enabled them to create monopoly markets in certain areas of the country. This industry was knows as the cut throat competition and profit margins measured in single digit percentage points. For example, in rural markets where Walmart was the sole

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