Question

is corporate-level diversification a reasonable strategic for Diageo Inc ? why or why not?

Answer 1

Diageo Inc is a famous British MNC that deals in the beverage alcohol industry and it has its headquarter in London. The company is operating in more than 180 countries and has production in 140 locations.

If we talk about the corporate level diversification it is the strategy in which the company tries to diversify in those areas of industries where the company is currently not operating. Thus this can be seen as a strategy to expand its product line and avoid competition in the current industry and also to utilize the brand name and brand strength in the other industries.

As Diageo Inc is one of the renowned companies and it has a strong presence in the alcohol industry, the company can use this strong brand name and brand equity to launch its product in other industries. This will facilitate the company to overcome the threat that can be presented by the competitions in its current industry. At the same time, this initiative will also help the company to have a greater operational level and to address the larger customer base. It is always better to have the diversification so that if one industry comes to any threat, the company can survive in other areas. Thus I think that it is advisable for the company to have corporate-level diversification but before that, the company must match its strengths and competitive advantage with the requirements of the industry in which it is going to enter