The answer to this concern is diminishing industry opportunities and also stagnating sales in its principal business.Companies have to only think about diversification if the previous product that thye do is already succesful and also they have actually enough resources to pursue one more segment of the market. If the sales is still stagnant, it finest to use the funding to reinvest in the present product until the growth is assured. (or also just prevent the manufacturing for the product and also start pursuing another)
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The agency could consider diversifying as soon as sales are start to slow and also there is a method to leverage few of the business"s core competencies in other areas that would be more competitive. In addition, this could permit the business to no worry around being "all-in" in a certain area, whereby that area"s success or failure can lead come the entire service thriving or failing. Through diversifying itself, the business can additionally lower production and also sales expenses or increase as whole sales.

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Journalize the following transactions that developed in september 2015 for aquamarines. No explanations are needed. Recognize each accounts payable and also accounts receivable with the merchant or customer name. Sep. 3 purchase merchandise perform on account from shallin wholesalers, $5,000. State 1/15, n/eom, fob shipping point. 4 paid freight bill of $80 ~ above september 3 purchase. 4 purchased merchandise inventory for cash the $1,700. 6 changed $500 the inventory native september 3 purchase. 8 offered merchandise inventory come hermosa company, $6,000, top top account. State 2/15, n/35. Price of goods, $2,640. 9 to buy merchandise list on account from thomas wholesalers, $8,000. Terms 2/10, n/30, fob destination. 10 made payment to shallin wholesalers for items purchased on september 3, less return and discount. 12 obtained payment native hermosa company, less discount. 13 after ~ negotiations, received a $200 pin money from cutting board wholesalers. 15 offered merchandise inventory to jordan company, $2,500, on account. State 1/10, n/eom. Expense of goods, $1,050. 22 do payment, much less allowance, to thomas wholesalers for products purchased ~ above september 9. 23 jordan firm returned $400 the the merchandise sold on september 15. Price of goods, $160. 25 marketed merchandise inventory to smithsons for $1,100 on account that price $400. Regards to 2/10, n/30 were offered, fob shipping point. Together a courtesy to smithsons, $75 that freight was included to the invoice because that which cash to be paid by aquamarines. 26 after ~ negotiations, granted a $100 allowance to smithsons because that merchandise to buy on september 25. 29 obtained payment native smithsons, much less allowance and discount. 30 got payment indigenous jordan company, less return.
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