Diversification example
There are many examples of firms that employ a diversification strategy. This group includes the large multinational conglomerates and other smaller firms that produce a large variety of products and services for a broad market. A prime example is General Electric (GE). GE has a significant presence in a wide range of industries but most of their units relate to manufacturing superior machines to solve problems. GE's consumer electronics and lighting are perhaps the most well known of their products by the general public. The same core competencies that enable GE to be a leader in kitchen appliances also give them the ability to develop and produce aircraft engines and high voltage equipment. In addition GE has financial services and healthcare units. Each business is tied to the basic strengths of the company and also provides a hedge against the risk of shocks to any one unit.