Assignment:
If NO, perform a search on a US-based, publicly-traded company that has moderate to high levels of diversification, than answer the questions below,
1. Provide the link to the corporation's website, where relevant facts about the corporation or investor information are posted.
2. Is the diversification Related Constrained or Related Linked? Why?
3. What is the dominant business? How much revenue does the dominant business generate?
4. What do you believe is the most interesting or unique aspect of the diversification?
---------------give in-text citations and References
MY COMPANY IS ADIDAS
Table: Reasons for Diversification
Value-Creating Diversification
1. Economies of scope (related diversification)
- Sharing activities
- Transferring core competencies
2. Market power (related diversification)
- Blocking competitors through multipoint competition
- Vertical integration
3. Financial economies (unrelated diversification)
- Efficient internal capital allocation
- Business restructuring
Value-Neutral Diversification
- Antitrust regulation .
- Tax laws Low performance
- Uncertain future cash flows
- Risk reduction for firm
- Tangible resources
- Intangible resources
Value-Reducing Diversification
- Diversifying managerial employment risk
- Increasing managerial compensation.