Dr. Tim's Premium All Natural Pet Food

There are other factors that contribute towards the growth in the organization and diversification being one among them. It means an organization introducing a new product to a new market. Through diversification the company can expand its operations and create a new source for income and on the other hand reduce its risk to a certain limit and it creates value. Diversification helps a company to survive in uncertain conditions because if an industry is occurring losses there will be cash flows from an another product that could be making ample profit to support the organization (Akbar D. Y., Strategy growth Entrepreneurship and company life cycle, 2015). Example of organization with diversified products is coca cola, coca cola sells many other products other than just cool drinks it sells juices, energy drinks, mineral water etc. (http://www.coca-colacompany.com/brands/all/) . An another example is Samsung which was said to be the largest diversified company in 2013 (Riley, 2013), Diversified products like smartphones, tablets, televisions and home appliances etc.
In a case study discussed in class about Dr. Tim all natural pet food, Dr. Tim has decided to diverse just from selling dog to cat food, which increased his scale of operations and led to growth (Case Study Dr. Tim's Premium All Natural Pet Food, 2015).

Its important to know about the other company and check about the opportunities. Sometimes merging or acquiring a wrong company would create heavy losses. Merger is when two individual companies combine their assets and liabilities and form an entirely new company. Acquisition is when a company takes over or purchases an another company with the view to expand or diversify its operations. Its mostly that large companies take over the smaller ones but there are instances where the smaller company takes over the larger one (Akbar D. Y., Global Strategy - mergers and acquisitions, 2015