In the ever-evolving business landscape, strategic moves and diversification can lead to remarkable transformations. Keeping an eye on emerging opportunities and leveraging existing strengths can unlock unprecedented growth and value for your organization.
Jun 24, 2023·edited Jun 24, 2023Liked by Rodrigo Vianna
Interesting content, Rodrigo. Thanks for sharing!
After learning about this framework, it seems to me that most diversification happens using the same skills for different needs (category coaction). One example that sustain my assumption is conglomerates (like GE or Unilever) who use their ability to manufacture highly-engineered products to set a footprint in different (yet related, in a way) industries. GE produces ultra-sound machines, airplane turbines, and appliances. Amazon, Apple, and Alphabet use their software engineering skills to venture into other industries.
I tried to think about successful innovations positioned in the Unrelated Diversification quadrant, although I could not know any. Would you have one?
I find it interesting your point of view on GE because I would argue GE is a classical example of unrelated diversification. GE diversified into many sectors, including Energy Infrastructure, Aviation, Healthcare, Transportation, Home and Business Solutions, and GE Capital. Although I see common skills among energy, aviation, and transportation, I believe the Healthcare segment (medical diagnostic equipment, disease research, drug discovery, and biopharmaceutical manufacturing technologies) and GE Capital (financial products such as loans, leases, fleet management, etc.) requires a significantly different set of skills.
In addition to the example of Alphabet's diversification into self-driving cars, I would also consider Apple entering the banking services business with Apple Card as another example of unrelated diversification.
I'm curious to hear your thoughts on those examples.
Yes, I think you hit the target with GE. Also, good point about Apple diversifying to banking services.
At first I was driven to think about notoriously unrelated industries.
A bit more of brainstorming and I came up with Disney. It owns amusement parks, hotels, cruise ships, streaming services (such as Disney Plus, Hulu, and ESPN). Nice exercise!
Good talking to you, Rodrigo. Hope everything is well. Your blog is insightful and you write about intriguing topics. Keep up the good work. :)
Interesting content, Rodrigo. Thanks for sharing!
After learning about this framework, it seems to me that most diversification happens using the same skills for different needs (category coaction). One example that sustain my assumption is conglomerates (like GE or Unilever) who use their ability to manufacture highly-engineered products to set a footprint in different (yet related, in a way) industries. GE produces ultra-sound machines, airplane turbines, and appliances. Amazon, Apple, and Alphabet use their software engineering skills to venture into other industries.
I tried to think about successful innovations positioned in the Unrelated Diversification quadrant, although I could not know any. Would you have one?
That's such a great question, Viola.
I find it interesting your point of view on GE because I would argue GE is a classical example of unrelated diversification. GE diversified into many sectors, including Energy Infrastructure, Aviation, Healthcare, Transportation, Home and Business Solutions, and GE Capital. Although I see common skills among energy, aviation, and transportation, I believe the Healthcare segment (medical diagnostic equipment, disease research, drug discovery, and biopharmaceutical manufacturing technologies) and GE Capital (financial products such as loans, leases, fleet management, etc.) requires a significantly different set of skills.
In addition to the example of Alphabet's diversification into self-driving cars, I would also consider Apple entering the banking services business with Apple Card as another example of unrelated diversification.
I'm curious to hear your thoughts on those examples.
Yes, I think you hit the target with GE. Also, good point about Apple diversifying to banking services.
At first I was driven to think about notoriously unrelated industries.
A bit more of brainstorming and I came up with Disney. It owns amusement parks, hotels, cruise ships, streaming services (such as Disney Plus, Hulu, and ESPN). Nice exercise!
Good talking to you, Rodrigo. Hope everything is well. Your blog is insightful and you write about intriguing topics. Keep up the good work. :)
Great reflection and intriguing examples you came up with Disney.
Thanks for your feedback, really appreciate it!
Top-notch content here!