home Accounting The specific types of diversified growth strategies group are. Diversified growth and determination of the optimal company size

The specific types of diversified growth strategies group are. Diversified growth and determination of the optimal company size

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The third group of reference business development strategies are diversified growth strategies. These strategies are implemented in the case when the company can no longer develop in this market with this product within the industry. The main factors determining the choice of a diversified growth strategy are formulated (Glueck, p. 211):

The markets for the business being carried out are in a state of saturation or a decrease in demand for the product due to the fact that the product is at the stage of dying;

The current business provides an inflow of money that exceeds the needs, which can be profitably invested in other areas of the business;

A new business can generate synergies, for example through better use of equipment, components, raw materials, etc.;

Antitrust regulation does not allow further expansion of business within the industry;

Tax losses can be reduced;

Access to world markets can be facilitated;

New qualified employees can be attracted or the potential of existing managers can be better used.

The main strategies for diversified growth are as follows:

centered diversification strategy based on finding and using additional features production of new products, which are enclosed in existing business. That is, the existing production remains at the center of the business, and the new one arises based on the opportunities that are contained in the developed market, the technology used, or in other strengths the functioning of the firm. Such capabilities, for example, may be the capabilities of the specialized distribution system used;

In business practice

The hotel chain "Hilton" is widely known in the world for its high-class hotels located in the central areas of large cities. Huge conference and banquet halls, large halls, porters in liveries, etc. are those features of the Hilton hotels that allow them to be classified as luxurious. The management of the Hilton network has never shown interest in the construction and operation of inexpensive mid-range hotels with the prefix "business hotel" (hotel for businessmen) or "Inn" (inn) to their name.

The management's commitment to preserving the image of expensive and upscale hotels for Hilton hotels has led to the fact that the growth of hotel space has practically stopped. This was due to the fact that the market of this class hotel services turned out to be saturated and did not expand. In order to get out of the current impasse and expand the amount of hotel space (until the end of this millennium, it is planned to increase the area by50%), management decided to start building 100 inexpensive hotels for mid-level businessmen, as well as for family living. New hotels should be located in the suburbs of big cities, which is usual for hotels of this class. Hotel room rate new network The Hilton Garden Inn will be within 50 - 80 dollars. At the same time, taking into account the fact that there is both high demand and high competition in the market for inexpensive hotels of this type, the Hilton Corporation plans to achieve some competitive advantage due to the relatively high level of customer service. In particular, each room will have a fax machine and a printer. In addition, each room will have a kitchen with a microwave.

horizontal diversification strategy involves looking for growth opportunities in an existing market through new products that require new technology different from the one used. With this strategy, the firm should focus on the production of such technologically unrelated products that would use the already existing capabilities of the firm, for example, in the field of supply. Since the new product must be oriented towards the consumer of the main product, it must be related in its qualities to the already produced product. An important condition for the implementation of this strategy is a preliminary assessment by the company of its own competence in the production of a new product;

In business practice

The main supplier of raw materials for the domestic tire industry (35% of all tire production is carried out from this raw material), FPG Neftekhimprom, bought a controlling stake in the Ukrainian enterprise Dneproshyn. This purchase marked the fact that FPG Neftekhimprom entered a new business for it - tire production. Prior to this, the group included enterprises engaged only in chemical production(processing of primary raw materials and production chemical materials): Orgsintez, Novokuibyshev petrochemical plant, Sintez rubber, Khimvolokno, Nipromteks. In addition to oil refining and the creation of synthetic materials, FPG "Neftekhimrpom" marketed tires produced from its raw materials on its order. through its own distribution network. In the future, Neftekhimprom intends to expand the tire business by including small, local tire factories in the group.

conglomerate diversification strategy consists in the fact that the company expands through the production of technologically unrelated new products that are sold in new markets. This is one of the most difficult development strategies to implement, since its successful implementation depends on many factors, in particular, on the competence of the existing staff and especially managers, seasonality in the life of the market, the availability of the necessary amounts of money, etc.

In business practice

In the view of many, a company that produces a Mercedes car should be an exceptionally successful company. For a long time, this idea of the Daimler-Benz concern was not in doubt. However, the beginning1996 was marked by a sensation. The head of the Daimler-Benz concern announced that the concern's losses in 1995 amounted to several billion dollars and that major restructuring within the concern is coming.

Created in 1926 the automobile concern "Daimler-Benz" in the mid-80s. headed for a sharp expansion due to the diversification of its activities. The original idea was to turn Daimler-Benz into a diversified technology concern. Aircraft manufacturing was chosen as the main area for the expansion of the concern. AT 1985 Daimler-Benz acquired Motor und Turbinen Union, a manufacturer of aircraft engines. In the same year, he acquired a controlling stake in the aircraft manufacturer Dornier, which in 1988 he bought out completely. Along with entering the aircraft industry, Daimler-Benz also entered the electrical industry. AT 1985 the concern acquired 25% shares of the electrical engineering company AEG. AT 1986 d. he increased his share in the share capital of AEG to 56%, and in 1988 G. - before 80%.

Diversification production activities demanded a structural transformation of the concern. AT 1989 The Daimler-Benz concern was transformed into a holding company that united four divisions: the automotive division of Mercedes-Benz, the aircraft division of Deutsche Aerospace (abbreviated as Dasa), the electrical division of AEG and the division of Daimler-Benz interservices".

The Daimler-Benz development program did not end there. The course towards the globalization of activities has led to the fact that in1993 The group's shares were listed on the New York Stock Exchange.

In an effort to expand its presence in the aerospace business, Dasa began 1990 d. negotiations with the Dutch aircraft manufacturer Fokker on the acquisition of its shares. The negotiations began in a year when Fokker was making very high profits. These negotiations ended with the acquisition of Das in 1993 G. 51% Fokker shares. However, immediately the following year, Fokker suffered huge losses. Dasa, trying to save the catastrophic situation, invested more than 600 million dollars. But in 1995 Fokker suffered losses again, Daimler-Benz decided that it was no longer possible to provide assistance to Fokker. This meant leaving it and losing billions. In parallel, Daimler-Benz also decided to part with a controlling stake in Dornier.

However, the losses associated with the activities of the Das aerospace department were not the only ones for Daimler-Benz. The unprofitable activity in the turboprop and jet aircraft market was quite explainable by the drop in demand for these products due to the end of cold war". But Daimler-Benz also suffered significant losses from the activities of the AEG electrical department. This forced the concern to terminate the independent existence of this branch. In fact, this meant that, having suffered huge losses. Daimler-Benz has embarked on a course of withdrawal from those industries in which it was not originally present and in which it entered, seeking to make an effective investment of capital created in its core area of activity. - automotive industry.

Diversification - expanding the range of products and reorienting sales markets. Diversification is associated with the development of new types of goods / services with the simultaneous development of new segments of the goods / services market. It's spread economic activity to new areas. A simple explanation of this term can be the well-known proverb "Don't put all your eggs in one basket." When diversifying most of The company's profit is provided, as a rule, by one or two key activities. The diversification strategy is implemented through the acquisition of an existing company, or the creation of a new company, the creation of a joint venture or a strategic partnership.

Diversification should not become a strategic priority until the main growth opportunities have been exhausted. sphere of activity of the company, since concentration on one type of business has organizational, managerial and strategic advantages. However, as a company's growth slows, diversification becomes an attractive means of improving a company's prospects. Diversification is also possible if the company has technological developments, key competencies or a resource base for successful competition in other areas.

The goal of diversification - increasing the value of the company's shares due to the fact that a group of heterogeneous companies within the corporation works more efficiently than each of them would work independently; thus, the effect 1+1=3 is achieved.
A company decides to diversify when: 1) the market is close to saturation; 2) there is an opportunity to achieve a synergy effect; 3) it is possible to ensure the stability of the company; 4) with increased competition; 5) the opportunities for developing the current business are narrowing; 6) diversification opens up new opportunities to increase the consumer value of the company's goods or strengthen its competitive position; 7) it is possible to transfer existing competencies and capabilities to other industries; 8) diversification into new industries allows to reduce production costs; 9) the company has financial and organizational resources that, in this moment it is more profitable to invest in highly attractive industries than in current activities. Criteria for the expediency of diversification: 1) Industry attractiveness criterion (provides an acceptable return on invested capital, the presence of favorable competitors and a market environment that creates the basis for long-term profitability). 2) Industry entry cost criterion (the cost of entering the industry should not exceed the potential profit from working in it) .3) Criterion of additional benefits (allows to reduce costs, share technologies and experience, create valuable competencies and capabilities, effectively use available resources, eg brand reputation). Diversified Growth Strategies: (implemented if firms can no longer develop in a given market with a given product within a given industry): 1) Centered diversification strategy . It is based on the search and use of additional opportunities in the existing business for the production of new products. Wherein existing production stays at the center of business. The company will release a new product only if the technology for the production of the new product is closely related to the technology for the production of the old product and with the competencies of the company. 2) Horizontal diversification strategy . It involves looking for growth opportunities in an existing market through new products requiring a new technology that is different from the one being used. With this strategy, the company should focus on the production of such technologically unrelated products that would use the existing capabilities of the company. Since the new product must be oriented to the consumer of the main product, it must be related in its qualities to the already produced product. An important condition for the implementation of this strategy is the firm's assessment of its own competence in the production of a new product. Briefly: an accompanying, non-core product that will strengthen the position of an existing product + competitive advantages.3) Conglomerate diversification strategy(brand new product and new business). The company expands through the production of technologically unrelated products that are already being sold in new markets. This is one of the most difficult development strategies to implement, since its successful implementation depends on many factors, in particular, on the competence of the existing staff, and especially managers, seasonality in the life of the market and the availability of the necessary Money. There are 2 approaches to diversification - in related and unrelated industries. related there is diversification strategic approach: it allows you to use the strategic alignment of value chains to create competitive advantages and achieve the effect of 1 + 1 = 3. Strategic alignment between enterprises or industries is said to be if: - their value chains, when combined, provide economies of scale or cost reduction through the exchange of technologies, sharing of production facilities, distribution system or name, brands; - there is a possibility of inter-firm transfer of technologies, skills, know-how - how and other resources; - company names or their brands can be shared; - there are opportunities for competitively meaningful cross-industry collaboration. Strategy unrelated diversification is usually chosen if the chosen company or industry has good financial prospects or if there is an opportunity to profitably acquire a new stable enterprise. Unrelated diversification is financial approach . Advantages:

The distribution of financial risks in different industries; - the possibility of a rapid increase in profits; - the mismatch of cyclical fluctuations in different industries. Cons of the diversification strategy - the strategy is costly, risky and difficult to manage.

20) Conditions for choosing an integrated growth strategy. The content of strategic alternatives for integrated growth. Integrated growth strategies involve expanding the company by adding new structures. Typically, a company may resort to implementing such strategies if it is in strong business, cannot implement a strategy of concentrated growth, and at the same time, integrated growth does not contradict its long-term goals. The company can pursue integrated growth, both through acquisition of ownership and through expansion from within. In both cases, there is a change in the position of the company within the industry.

vertical Integration is the process of expanding the scope of a company's activities within an already developed industry. Companies can expand their activities "back" - towards suppliers (when the quality of supplied raw materials is important, when the market is stable, when transportation costs can be reduced) and/or "forward"- to the end user of the product (when it is important to quickly deliver to the consumer, market control is important). A vertical integration strategy can target complete (participation in all links of the industry value chain) or partial integration(occupying positions in the key links of the industry's value chain).

2 paths: the company creates its own divisions that cover other links in the industry's value chain or absorbs companies operating in these links. A vertical integration strategy only makes sense if it strengthens a company's competitive position.

Vertical integration makes sense , if: 1 . suppliers and sellers have a high rate of profitability; 2 . supplied components make up the bulk of the cost final product; 3 . the necessary technological skills are most easily acquired or obtained by absorbing the supplier who owns them; 4. independent performance of operations by the organization contributes to a radical improvement in the quality of goods, the level of service, etc. 5 . allows the company to create new core competencies, improve basic operations, give the product characteristics that increase its value in the perception of the buyer; 6. reduces the company's dependence on major suppliers and sellers; 7 . the company's management is able to effectively manage with an increase in the number of links in the value chain.
Strategic disadvantages of vertical integration: The main disadvantage of the vertical integration strategy is that it pulls the company deeper into the industrial relations system of the industry; 1) increases investment in the industry where the company operates, thereby increasing the risk. 2) forces the company to focus only on its own capabilities and sources of supply. 3) makes it difficult to balance capacities in each link in the value chain. 4) different skills and capabilities are required. 5) Vertical integration with component manufacturers can reduce a company's manufacturing flexibility, increase development time and bring new models to market. 6) There is no incentive for the development of the captured departments. 7) The adoption of strategic decisions is slowed down.

Horizontal Integration is an acquisition or merger with a competitor or a company operating at a similar stage in the value chain. Conditions of expediency: getting more market share; scale effect; obtaining competitive advantages and secrets of acquired companies; an organization may have an excess of financial and labor resources, which will allow her to manage the expanded company; bundling can be a means of eliminating a close substitute product; the competitor they want to buy may have a significant shortage of financial resources.

21. Definition of the concept of "competitive advantage". Key benefits and risks of a differentiation strategy. Competitive advantage (CP) is the position of the company in the market, allowing it to overcome the forces of competition and attract customers. the basis of competitive advantages are the company's unique assets, or special competence in areas of activity that are important for this business. KP, as a rule, are implemented at the level of strategic business units and form the basis of the company's business (competitive) strategy. There are many ways to achieve CP, but the most common are: - cost leadership; - product differentiation; - focusing; - early market entry (first mover strategy); - synergy. Strategies differentiation are used in situations where consumer needs and preferences, due to their diversity, cannot be satisfied with standard goods or the previous composition of sellers. For successful differentiation, a company must study the needs, behavior, preferences of customers and their perception of the consumer value of the product. After that, the company adds to its product or service the consumer properties that are most valuable from the point of view of buyers, and at their expense creates a distinct difference from the product or service of competitors. The CP will appear when the new features of the product attract a sufficient number of buyers. The more buyers value these differentiating properties, the stronger their commitment to the company's products and, accordingly, the greater its CP. Successful differentiation allows a company to: - charge a higher price for its product or service and / or - increase sales (distinctive consumer properties of the product attract additional buyers) and / or - increase the level of loyalty of buyers to their brand (some buyers highly value additional consumer properties products). The differentiation strategy is optimal when:- there is ample opportunity for differentiation, and most consumers find additional features really valuable; - the needs of customers and ways of using the product are diverse; - competitors have chosen different directions of differentiation; - the industry is distinguished by the rapidity of technological and innovation processes, and competition is based on rapidly changing product properties. Disadvantages of Differentiation Strategy:1) Creation of a differentiating feature that, from the point of view of the buyer, does not reduce his costs and does not give him new advantages. 2) Differentiation will not give the expected result if competitors can quickly reproduce the distinctive consumer properties of the company's product. 3) Excessive differentiation, when the price is much higher than the price of competitors, and the properties of the product (service) exceed the needs of the consumer. 4) Too high price for additional consumer properties 5) Refusal to notify consumers about new properties of the goods in the expectation that the buyer himself will notice them. 6) Misunderstanding or ignorance of what properties of the goods the buyer considers valuable.

The third group of basic or reference strategies includes diversification growth strategies. This type of strategic plans is implemented when the company can no longer effectively develop in this market with this product within the industry. This term is often associated with expansion into an area unrelated to current activities organizations. Such a strategy, which requires large investments for its implementation, can usually be carried out only by large organizations. The main strategies for diversifying growth are as follows:

1. The strategy of centered diversification is based on the search for and use of additional opportunities for the production of new products that are included in the existing production and economic activities. That is, the existing production remains in the center economic activity, and the new arises on the basis of those opportunities that are contained in the developed market, the technology used, or in other strongest aspects of the functioning of the company, for example, the capabilities of the used specialized system distribution and implementation.
2. The horizontal diversification strategy involves looking for growth opportunities in an existing market through new products that require a new technology that is different from the one used. When implementing this type of strategy, the firm should focus on the production of such technologically unrelated products, for example, in the field of supply. Since the new product must be related to the already produced product, then in terms of its qualities it must be related to the already manufactured product. An important condition for the implementation of this strategy is a preliminary assessment by the company of its own competence in the production of new products.
3. The strategy of conglomerate diversification is that the organization expands through the production of new, technologically unrelated products already produced, which are sold in new markets. This is one of the most difficult strategies for the development of an enterprise, since it successful implementation depends on a large number of different factors, in particular, on the competence of personnel and, in particular, management specialists, seasonality in the life of the market, and the availability of the necessary amounts of financial resources.

In practice, a firm can simultaneously implement several strategies. This is especially true for multi-industry companies. The firm can also produce a certain sequence in the implementation of strategies. When choosing a specific strategy, the following key factors should be considered.

The strengths of the industry and the strengths of the firm can often play a decisive role in choosing a firm's growth strategy. Leading firms, depending on the state of the industry, must choose different growth strategies. So, for example, if the industry is declining, then one should bet on diversification strategies, but if the industry is booming, then the choice of growth strategy should fall on the strategy of concentrated or integrated growth.

Weak firms, in turn, should choose those strategies that can improve their position within the existing industry. If there are no such strategies, then they should leave the industry, that is, choose a reduction strategy.

Other factors that determine the choice of a particular strategy include the interests and attitudes of top management to risk, to certain markets, products, competitors, etc.; financial resources firms; qualification of employees; commitments under previous strategies; degree of dependence on external environment; time factor. Development business activity firms (enterprises) is determined by the following circumstances: in which market it operates, i.e. whether the market is established or new to it, and what product or services it enters the market with (products that are new to the market or not). The practice of market relations has developed several basic directions that form the activity of the behavior of firms.

1. Expansion of the activity of the firm (enterprise) "deep", i.e. segmentation of existing markets in order to capture new consumer groups with their products.
2. Expansion of the activity of the firm (enterprise) "in breadth", i.e. diversification of production through the release of new types of goods (products) both related to the main profile of the enterprise and not related to it.
3. Expansion of the activity of the company "quantitatively" - the growth of sales volumes by increasing the volume of production of an unchanged range of goods for the existing market.
4. Expansion of the activity of the firm "across the borders", i.e. Ensuring the increase in output by entering new markets.

As a rule, these strategies are presented in the form of a matrix built depending on the product and the market (Table 1).

Table 1 Matrix of basic strategies

Field A1 is characterized by a deep penetration strategy ("old" product - "old" market). This strategy is successful when the market is not yet saturated. A firm can achieve a competitive advantage by reducing production costs and selling prices of services.

As for the field A2, it is characterized by a market expansion strategy ("old" product - "new" market). When using this strategy, the company tries to increase the volume of sales of its goods (services) in new markets or in new segments of the existing market.

The product development strategy ("new" product - "old" market) is typical for positioning in field B1. This strategy is effective in creating new product modifications for existing markets. Field B2 is characterized by the presence of a diversification strategy ("new" product - "new" market). This strategy is used to eliminate the firm's dependence on the production of a particular product (service) or on a particular market.

The basic growth strategies of the firm predetermine the main types of strategies of strategic business units, of which three main types can be distinguished.

1. Offensive strategy (attacking) -- a strategy for gaining and expanding market share.
2. Defense strategy -- a strategy to retain the existing market share.
3. Retreat strategy - a strategy to reduce market share in order to increase profits as a result of a gradual exit from the market or liquidation of this business.

The use of a particular type of strategy by a firm is determined by the position of the firm in the market, which is characterized by its market share (as a percentage). Depending on the market share, the following provisions of the company and its strategy are distinguished:

It should be noted that the least risky is the expansion of sales of already produced goods. Then comes the entry with new products to old markets and the entry of old products into new markets. The most risky is the release of new products on new market.

strategy diversification behavior

The third group of reference business development strategies are diversified growth strategies. These strategies are implemented if firms can no longer develop in a given market with a given product within a given industry.

The main factors determining the choice of a diversified growth strategy are formulated:

· the markets for the ongoing business are in a state of saturation or a decrease in demand for the product due to the fact that the product is at the stage of dying;

· the current business gives the receipt of money exceeding the needs, which can be profitably invested in other areas of the business;

· a new business can generate synergies, for example, through better use of equipment, components, raw materials, etc.;

· antimonopoly regulation does not allow further expansion of business within the industry;

tax losses can be reduced;

· access to world markets can be facilitated;

• new qualified employees can be attracted or the potential of existing managers can be better used.

These types of strategies are:

· The strategy of centered diversification is based on the search for and use of additional opportunities for the production of new products, which are concluded in the existing business. That is, the existing production remains at the center of the business, and the new one arises based on the opportunities that are contained in the developed market, the technology used, or in other strengths of the firm's functioning.

Such capabilities, for example, may be the capabilities of the specialized distribution system used;

Business example:

The hotel chain "Hilton" is widely known in the world for its upscale hotels located in the central areas of large cities. Huge conference and banquet halls, large halls, porters in liveries, etc. are those features of the Hilton hotels that allow them to be classified as luxurious.

The management of the Hilton network has never shown interest in the construction and operation of inexpensive "middle-class" hotels, which have a prefix to their name "business hotel" (hotel for businessmen) or "Inn" (inn).

The management's commitment to preserving the image of expensive and upscale hotels for Hilton hotels has led to the fact that the growth of hotel space has practically stopped. This was due to the fact that the market for this class of hotel services turned out to be saturated and did not expand. In order to overcome the current impasse and expand the amount of hotel space (by the end of this millennium, it is planned to increase the area by 50%), the management decided to start building 100 low-cost hotels for mid-level businessmen, as well as for family living. New hotels should be located in the suburbs of big cities, which is usual for hotels of this class. The cost of a room in the hotel of the new Hilton Garden Inn chain will be in the range of 50-80 dollars. competitive advantages due to a relatively high level of customer service. In particular, each room will have a telefax and a printer. In addition, each room will have a kitchen with a microwave.

· Horizontal diversification strategy involves looking for growth opportunities in an existing market through new products that require a new technology that is different from the one used. With this strategy, the firm should focus on the production of such technologically unrelated products that would use the already existing capabilities of the firm, for example, in the field of supply. Since the new product must be oriented to the consumer of the main product, it must be related in its qualities to the already produced product. An important condition for the implementation of this strategy is a preliminary assessment by the company of its own competence in the production of a new product;

Business example:

The main supplier of raw materials for the domestic tire industry (35% of all tire production is carried out from this raw material), FPG Neftekhimprom bought a controlling stake in the Ukrainian enterprise Dneproshyn. This purchase marked the entry of FPG "Neftekhimprom" into a new business for it - tire production. Prior to this, the group included enterprises engaged only in chemical production (processing of primary raw materials and production of chemical materials): Orgsintez, Novokuibyshev petrochemical plant, Synthesis rubber, Khimvolokno, Nipromteks. In addition to oil refining and the creation of synthetic materials, FPG "Neftekhimprom" sold tires produced from its raw materials on its order through its own distribution network. In the future, Neftekhimprom intends to expand the tire business by including small, local tire factories in the group.

· the strategy of conglomerative diversification is that the firm expands through the production of technologically unrelated new products that are sold in new markets. This is one of the most difficult development strategies to implement, since its successful implementation depends on many factors, in particular, on the competence of the existing staff and especially managers, seasonality in the life of the market, the availability of the necessary amounts of money, etc.

Business example:

In the view of many, a company that produces a Mercedes car should be an exceptionally successful company. For a long time, this idea of the Daimler-Benz concern was not in doubt. However, the beginning of 1996 was marked by a sensation. The head of the Daimler-Benz concern announced that the concern's losses in 1995 amounted to several billion dollars and that major restructuring within the concern was coming.

Created in 1926, the automobile concern "Daimler-Benz" in the mid-80s. headed for a sharp expansion due to the diversification of its activities. The original idea was to turn Daimler-Benz into a diversified technology concern. Aircraft manufacturing was chosen as the main area for the expansion of the concern. In 1985, Daimler-Benz acquired Motor und Turbinen Union, a manufacturer of aircraft engines. In the same year, he acquired a controlling stake in the Dornier aircraft manufacturing company, which he bought out in full in 1988. Along with entering the aircraft industry, Daimler-Benz also entered the electrical industry. In 1985, the concern acquired a 25% stake in the electrical engineering company AEG. In 1986, he increased his stake in AEG to 56%, and in 1988 to 80%.

The diversification of production activities required a structural transformation of the concern. In 1989, the Daimler-Benz concern was transformed into a holding company that united four divisions; the automotive division of Mercedes-Benz, the aircraft division of Deutsche Aerospace (abbreviated as Dasa), the electrical division of AEG and the division of Daimler-Benz Inter-Services.

The Daimler-Benz development program did not end there. The course towards the globalization of activities led to the fact that in 1993 the concern's shares were included in the listing of the New York Stock Exchange.

In an effort to expand its presence in the aerospace business, Dasa began negotiations in 1990 with the Dutch aircraft manufacturer Fokker to acquire its shares. The negotiations began in a year when Fokker was making very high profits. These negotiations ended with the acquisition by Das in 1993 of a 51% stake in Fokker. However, immediately the following year, Fokker suffered huge losses. Dasa, trying to save the catastrophic situation, invested over $600 million in Fokker. But in 1995, Fokker again suffered losses. Daimler-Benz decided that it was no longer possible to provide assistance to the Fokker company. This meant leaving it and losing billions. In parallel, Daimler-Benz also decided to part with a controlling stake in Dornier.

However, the losses associated with the activities of the aerospace department of Das were not the only ones for Daimler-Benz. Loss-making activity in the turboprop and jet aircraft market was quite explainable by the drop in demand for these products due to the end of the Cold War. But "Daimler-Benz" suffered significant losses from the activities of the electrical department of "AEG". This forced the concern to terminate the independent existence of this branch. In fact, this meant that, having suffered huge losses, Daimler-Benz took a course to leave those industries in which it was not originally present and in which it entered, seeking to make effective investments of capital created in its basic field of activity - the automotive industry. .