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Our third critical thinking exercise deals with concepts of a company’s diversification and expansion into other industries, as discussed in chapter 8. As discussed in the notes for this week, expanding beyond a single market or industry may be highly beneficial to a company because it helps in exploring potentially untapped markets and also spreads out the risk of doing business. However, a company must take many things into consideration before taking a plunge into a new market or industry. Several factors ranging from the lucrativeness of the new industry to internal capacity with the company play major roles in the success or failure of diversification decisions. Below, you will find a downloadable article (along with a web-link to the same article) from the Harvard Business Review titled “Growth outside the Core”. The article explores various facets of expansion into a new market/business for a company, and provides relevant examples to clarify important arguments. Article: https://hbr.org/2003/12/growth-outside-the-core To participate in this week’s CTE, after reading the article carefully and obtaining any additional information you may deem fit, please answer the following questions: 1) Which things/factors should be paid careful attention to by companies trying to diversify (expand) into new markets/businesses/products? 2) Why are these things/factors important? Explain in detail each factor that you can identify in the article. Feel free to obtain information from external sources. Please support your arguments using relevant examples (from the article or other sources).
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