Slide No. 3

For the purpose in which an existing business want to grow in different business line then it can do this by following diversified business line. For the purpose of expanding business through the different line may have to face number of challenges involved in it and these challenges are mentioned as following. The interest of top management in that new line business is very important and if management lacks its interest it would ultimately results in business failure. The other risks are also as much important as the first one and these are misunderstanding about the requirements of business, unavailability or required knowledge by the project management committee. These all risks should be identified properly and precautionary measure should be taken in order to avoid these risks and problems.

Slide No. 4

Diversification reasons may differ from business to business and for the nature of existing business as well. For example if the management think that the existing business could not give the desired profit level and the proposed business leads towards success as well as it would be proved helpful in uplifting the existing business line as well then the management will go for that particular business. The other reasons may be the existing company has large amount of surplus capital and this capital if invested in the existing line then would not proved to be beneficial and it is adequate for the existing one so for the proper utilization of this surplus amount companies moves towards the diversified line of business.

Slide No. 5

There is lot of difference in these three types of businesses the tax business, the audit business and the consultancy business. All the risks associated with these lines of business are different and these businesses need different expertise, knowledge and experience. In the business of tax the latest knowledge relevant to the tax policies is needed to the employees and latest software is required for updating these changes time to time in system software. In audit services business all the staff have to be familiar with the policies and procedures of tax and the sense to access the need what type of audit is required by the company. In the last as far as the consultancy business is concerned then the special permission of government is to be taken for the purpose of providing relevant legal services to the clients.

Slide No. 6

There are number of risks that are involved in starting new diversified business and these risks are mentioned one by one in the slide. One of the main risks is the imitation of the competitors when a new business started by the company the existing direct and indirect competitors are trying to copy the same line of business to maintain the good competitor position in the market. The other risk factor would be the demand suddenly disappearance. When the new line of business is started then proper research for the purpose of assessing demand is to be made by the company but in case of some unseen circumstances these demands drastically fall and would cause severe loss to the new line of business. The change in technology and non availability of proficient staff will cause the loss to the company and the will leads the business towards loss.

Slide No. 7

Intel is dealing in providing technology relevant services and in order to change the line of business the Intel needs experience and proficient staff member and these all things could not be achieved in a very short period of time. In order to assist existing policies and building new successful policies its favorable for the company to acquire the same nature of business and take all the benefits which are not possible in case of starting the business by itself. All these recommendations would prove very helpful in planning and building the new successful line of business and maintain good competitive position.

Slide No. 8

There are multiple benefits enjoyed in case of starting the new line of business by acquiring the existing business. Number of government tax subsidies is to be provided as well as tax rates are less for these companies. Cost of hiring the new staff for the new line of business also save the expense. This will require fewer efforts for the existing company because they are new for the new line of business by the acquiring company is expert in the particular field. These all benefits take the company towards success and development and the attainment of goals in time.