Case Scenario 1: Syco.
Syco is a diversified company that has six primary lines of business. Fifty percent of its revenues and 18 percent of its profits come from retailing. Most of its retail outlets are discount department stores that serve as anchor tenants for large suburban shopping malls. The remaining businesses are broken out as follows: Insurance accounts for 30 percent of revenues and 50 percent of profits; consumer credit card operations are 6 percent of sales and 17 percent of profits; 5 percent of revenues and 6 percent of profits come from its stock brokerage business; commercial and residential real estate operations generate 4 percent of sales and 8 percent of profits; finally, 5 percent of revenues and 1 percent of profits come from its online portal business. The company's management states that all these businesses are essential to its competitive future.
-(Refer to Case Scenario 1). What diversification strategy best describes Syco? Assume that retailing,insurance,consumer credit card,stock brokerages,and online portal businesses allow for some transfer of knowledge about consumer behavior including buying and bill-paying habits.

Question

Quizplus · Accepted Answer

Syco's diversification strategy is related linked because the different businesses allow for some transfer of knowledge about consumer behavior, such as buying and bill-paying habits. Additionally, the company's management states that all these businesses are essential to its competitive future, indicating a level of synergy between the various business lines.