There is a possibility of blocking a payment system due to a dubious reputation or in response to the actions of the government of a particular country. We have recently encountered something similar.
you should think in advance about how to withdraw savings in case of unforeseen circumstances.
Also, the diversification of enterprise risks may differ depending on the business sector:
Related diversification. The line data package company moves to develop a related area that has much in common with the previous line of business.
Unrelated or conglomerate . The organization is essentially entering a completely new market. For example, Amazon has traditionally been a marketplace, but gradually the company has also begun to develop games. This is a parallel line of business, completely unrelated to Amazon's original specialization.
According to the method of organization, diversification can be:
Internal. The company expands its current business by forming new divisions that may eventually become independent entities.
External. To develop non-standard directions, other enterprises are included in the company. This provides a number of advantages - neutralization of competitors, risk reduction due to the assimilation of the experience of acquired companies. In addition, the company that initiated the acquisition receives new technologies at its disposal.
Depending on the direction, there are two possible diversification options:
Horizontal. The company absorbs competitors engaged in similar activities. In this case, the risk is reduced as a result of weakening competition and strengthening the position in the market.
Vertical. The direction of the business remains the same, while the company seeks new ways to operate in the current area. For example, an oil company may additionally carry out transportation and processing of oil.
In the presented classification, it is possible to indicate smaller categories for each type.
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What can you diversify to reduce risks?
Experts consider many ways to diversify risks. We will focus only on the most common areas.
Diversification of production is the production of different types of products. An example would be the simultaneous production of crackers and chips at a factory or the bankruptcy of individuals and organizations by a law firm.
Business diversification is investing in other areas. The company expands its activities in areas not related to its core business.
Yandex is a good example. Being primarily a search engine, the company also organizes passenger transportation, food delivery, training, etc.
Diversification of an investment portfolio is investing in various assets, business areas and regions. That is, an investor can spend funds in parts to purchase federal loan bonds, shares of large enterprises and currency.
What can you diversify to reduce risks?
Diversification of the economy is the implementation of investments from federal or regional budget funds for the development of certain industries. As a result, support is provided to enterprises of great value. Thus, in 2008, to overcome the consequences of the crisis, the Russian government provided significant subsidies to the companies Alfa Group and Rusal.
Price diversification is the inclusion of goods and services at different prices in the assortment. The company seeks to attract various categories of buyers, for which it offers goods in a wide price range. For example, a chain store sells cheap olive oil for 500 rubles and premium oil for 1,000 rubles. This is how price diversification is achieved.
Diversification of activities is the presence of several sources of income for an individual. For example, a doctor can combine work in a state health care institution with private practice. Or a programmer can, in addition to his main activity, conduct training and publish articles on a blog, receiving income from advertising.
How to achieve multiple