Diversification

The term Diversification designates an expansion of the assortment. It is in particular in the purchase to the products of an enterprise and for investments of funds common.

Product diversification

Those Product diversification is present, if a new Line introduces. The opposite is that Retreat.

Direction

• horizontal: An enterprise takes up a product of the same wirtschaftsstufe to its assortment. There is a material connection with the past product program.

z.B.: A passenger car manufacturer produces truck.

• vertical: Orients itself at the creation of value chain and designates the extension of the production program around products from pre and stored wirtschaftsstufen (also forward/backwards integration called)

z.B.: A restaurant operates agriculture for the production of favorable meat and vegetable.

z.B.: An automaker produces tires.

• laterally: Designates the extension of the production program around products, which are completely new for the enterprise and no technical or economic connection with the past products.

z.B.: An automaker produces airplanes (new products on new markets)

• concentrically: An automaker, who coordinates particularly well suppliers, does this in the aviation industry (abilities into other creation of value chain export).

A possible measure for the measurement of the diversification is that Berry index.

Forms

• internally: The enterprise grows from own strength and develops the product;
• : Another enterprise is in addition-bought including the desired products;
• Co-operation: New products are developed with a partner. Co-operation can be differently intensive, draw of Joint venture up to strategic alliances and networks.

Plant diversification

Within the investment of funds range becomes of Diversification spoken, if if possible into different financial assets one invests.

As Riskdiversification designates one the effect from it arises that one two or more with one another in one combines. The in such a way won Portfolio has a smaller as the two individual securities. A condition is, it possesses to each other one and/or. those the securities and/or. the Portfolios.

See also: Portfoliotheorie

This can be: , , Real estates, and Futures or alternative plants. There are substantial differences within the particulars Eating classes. For example bonds can gilt-edged Plants its how and are those and that shortfall approach. All mass in the financial asset are statistic sizes and indicate only one loss or probability of profit. Therefore a maximum loss/gain cannot be guaranteed, but only with a certain to be assured. In pronounced Boom phases or Anomalies of market these sizes are often missed, D.h. there is no profit. Even substantial losses can develop, which go beyond the expected risk.

Task of an experienced investment consultant is it to achieve exactly this correct mixture of the different eating classes and on a long-term basis to obtain thus a positive value development of the invested capital.

By the increasing mechanization it is possible to compute for the Gesamtportfolio the risk and further mass contained in it. Modern computer procedures make one possible Stress test. Worst case and best case situations in the computer are simulated and the effects on the Portfolio are analyzed. According to the simulation result opposite standpoints are developed, in order to neutralize these risks. Since this represents a very complex procedure, it becomes from cost reasons only with particularly large (particularly for institutional investors or for the Portfolio of a fund) accomplished.

See also: Portfoliotheorie