Case Study of Production Diversification Strategy in an Industrial Company

Abstract

The paper addresses diversification strategy as a possibility to solve the problem of reduced use of production capacity caused by external factors such as a decline in demand in the core business. On the basis of real case study of a Czech production company the paper presents the methodology for the development of the diversification strategy with the aim of successful penetration to industrial sectors. The whole process is divided in four phases. The first phase is focused on the identification and assessment the production and competitive competences of the company. The second phase deals with the evaluation of potential sector attractiveness and feasibility of entry in the analysed sector. The received results served as a basis for setting a complex evaluation matrix subsequently, which was used to target on the most promising sectors. A detailed survey was carried out, that focused on the selected sectors within the third phase providing a basis for key success factors identification and potential entry scenario projection. The last phase focuses on important aspects of economic efficiency estimation of the entry into the selected industrial sector.