The Success and Failures of Diversification Strategies Essay

The Success and Failures of Diversification Strategies - Essay Example From the study it is clear that in order to examine the corporate strategy of diversification, it is important to gain an understanding of the concept. Looking at the theories and types of diversification potentials allow for a developed knowledge of this business strategy. As well, looking at firms who have diversified and the eventual results will further the investigation. Specific examinations of General Electric and Berkshire Hathaway in comparison with Tesco, HSBC, and Vodafone will allow for examples of diversified interests to reveal how these strategies are successful or without success.As the discussion stresses  DuPont is considered the leading pioneer of diversification. The Clayton Antitrust Act of 1914 in the United States limited the ability of a corporation to grow through acquisitions and mergers. In 1916 DuPont became the target of an investigation that was pivotal in the future of the strategy of diversification. DuPont, however, did continue to grow through the additions of  chemicals and paints to its gunpowder. The Cellar-Kefauver Act of 1950 made it more difficult to achieve vertical and horizontal integration, thus promoting more diversifications that were the beginnings of the conglomerations. New tariff policies that grew through the 20th century also encouraged companies to turn to diversifications strategies in order to compete with foreign imports that were cheaper and impeded the progress of companies that depended on the products that were not available.