Question

What are the different between concentric diversification (Offence) and backward integration (Defence).

50marks need more words

please help me

Answer 1

Concentric diversification is a strategy for growth and expansion wherein new products are added to the existing product lines so as to attract new consumers.

Backward integration is when a business moves up in the supply chain to cover a wider range of activities in a bid to increase profitability and efficiency.

The key differences between them would be as follows:

• Diversification aims at expanding the activities at the lowest level, ie, the level of sales. Integration aims at increasing profitability by moving up the supply chain.
• Diversification tries to attract new customers. Integration aims to reduce dependency on other suppliers and middlemen.
• Integration does not need to consider consumer expectations. Diversification takes into account the expected consumer reactions.
• It is more convenient to reverse a diversification in case it is not performing well rather than an integration .