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Taking this from the ACCA syllabus:
“Explain and analyse the concepts of spreading and diversifying risk and when this would be appropriate.”Couldn’t find anything that covers that in the risk portion of the lectures. There is a separate point on TARA, so I am assuming this question/topic relates to something different.
I am assuming it is related to Ansoff matrix and speciffically to the vertical/horizontal integration.
The thing is, conglomerates would be perfect in this context (unrelated businesses industries etc), but I understand why Porter doesn’t like them as a growth strategy ( chaebols success or not). Does that mean we should consider related company diversification?
Couldn’t find anything in old P3 books on this and no new texts on sale …. sighThanks for the lectures.
Riak prevades the syllabus and there are over 300 mentions of ‘risk’.
Spreading and diversifying riskand its appropriatness are not really separate topics and are part of general risk managment. There is, perhaps, particular relevance when talking about:
Risk appetite
Risk consolidation/pooling
Diversification
Conformamce v performamce
Risk quantification (probability and consequences)
TARA
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