Annotated Bibliography

Annotated Bibliography on Value Creation Through Diversification The competition between companies over product diversification has heartened strategic theorists, leaders, and management research scholars to scrutinize the influence of diversification on a business's performance. Conventionally financial and economic model acclaims diversification at the corporate level to assist and provides opportunity to investors for their portfolios' expansion at a lesser rate. Likewise, firms make a variety of strategic choices concerning their core area of businesses to add value (Dyer, Godfrey, Jensen, & Bryce, 2016). However, businesses deem appraising different scopes of model portfolios with regards to the risk tolerance and aligning their strategies

These value-adding realities must consider the company structure. This idea means companies may use different investment models to gauge their growth while estimating their units' performance. Moreover, for the authors, corporate's growth options have different levels of systematic risk to acquiring a significant number of segments. That assumption explicated that diversification strategy is also about a cross-section of layers attraction combined with more diverse markets exploitation. Also, for Andrés et al. (2017), the value-adding strategy through diversification is a defensive approach with the aim to shield a business operation during strong competition and demand drops scenarios. This fact fits for new businesses that have built their diversification models on a single product. In this case, a declining market share might intimidate the subsistence of a single product

For the critics, an accurate model exemplified the organizational and financial design of an industry with the persistence of illuminating performance. Likewise, Nguyen and Cai (2016) provided a detailed level of a business model strategy with entailing facts suchlike key processes, a profit formula and forecasting. Hence, determining the factors pre-mentioned and aligning them with a firm value creation, is an inspiring way to add value in a firm’s diversification plan. Moreover, Nguyen and Cai (2016) underscored a corporate-level acquisition approaches to attain product diversification. The aim of this philosophy consists of constructing core competencies of product for a secure value adding. This thought means, the acquisition strategy to add value strategy depends on the core competencies of a firm production. Also, the essayists accredited that businesses use this model of diversification (an acquisition strategy) for several reasons. Firstly, corporations acquire or merge to gain a competitive advantage to achieve a guarantee marketing network. This way opens opportunities for companies to expand in different markets with a wider customers foundation. The second reason for merging and acquisition explained the businesses’ aims to increase their capabilities in their area of competence. That said, this method permits firms to develop vigorous