Page 7: Diversification
Ansoff pointed out that a diversification strategy stands apart from the other three strategies. The first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line.
Diversification, however, usually requires a company to acquire new skills, new techniques and new facilities. This implies significant investment.
One way in which Amway has diversified its activities is through creating an on-line business opportunity called 'AMIVO' to support and enhance its traditional business. This makes use of the internet. The internet is a good example of a structure that no one firm has had to pay to construct, but which is available to all firms now that it has been constructed. The challenge to each business is to identify how to use the internet in ways that are advantageous to it and also profitable.
Amway has succeeded in doing just that. The European platform of AMIVO was first launched within the UK to provide a one-stop office for IBOs. IBOs can use AMIVO for:
- a means for Amway to communicate with IBOs quickly
- ordering products from their home 24 hours a day, 7 days a week
- a communication tool to promote their business
- keeping track of their business status
- a reference resource
- a medium to recognise IBO business achievement.