Diversification

Jacqueline Cannon and Patricia M. Hillebrandt

Chapter 3 in The Management of Construction Firms, 1989, pp 31-43 from Palgrave Macmillan

Abstract: Abstract In this chapter, ‘diversification’ is defined as the process by which firms extend the range of their business operations outside those in which they are currently engaged. This broad definition includes (a) the process referred to as backward vertical integration — that is, the acquisition or development of businesses whose products are inputs to the firm’s own main operations, (b) forward integration — that is, the extension of the firm’s activities to those of the normal purchaser of its products, (c) horizontal diversification — that is, a movement into other markets not involving the firm in any vertical relationships as in (a) and (b) above. Any of these forms of expansion may take place either by internal development or by merger or takeover.

Keywords: Transaction Cost; Cash Flow; Vertical Integration; Portfolio Theory; Downstream Firm (search for similar items in EconPapers)
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-13626-1_3

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DOI: 10.1007/978-1-349-13626-1_3

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