The study further says retail space is expected to increase from 10 million sq. ft. in 2002 to 80 million sq. ft. in 2010. Retail space development in leading centres will provide high impetus to retail growth as about 38 per cent of India’s high income households live in the top five cities (Mumbai, Delhi, Kolkata, Chennai and Bangalore), and an additional 28 per cent stay in mid-sized cities.
Significant growth in organized retailing during the next three years is expected in the metros and mini-metros through better performance of the existing stores, as well as opening of new stores. From 25 operational malls in 2003, the country is expecting over 600 malls by 2010. Accordingly Videocon Industries spotted organized retailing as the bright spot for future investments to the tune of Rs25, 000 crore by 2010.
3. Obtaining a ‘bargain’ price for a business
Another way to improve the ROI is to acquire a business at a ‘bargain’ price so the involved investment is low and the associated ROI is therefore high.
4. The potential to restructure a firm:
Allen, Oliver, and Schwallie, three Booz Allen acquisition specialists have suggested another possibility: that an acquisition can provide the basis for a restructuring of the acquired firm, the acquiring firm, or both.
5. Reducing risk:
The reduction of risk can be another motivation for unrelated diversification. The heavy reliance upon a single product line can stimulate a diversification move. Reducing risk can also lead to entering into businesses that will counter or reduce the cyclical nature of the existing earnings.
6. Risks of unrelated diversification:The very concept of an unrelated business, where by definition there is no possibility to improve that business through synergy, suggests risk and difficulty. Many knowledgeable people have made blanket statements warning against unrelated diversification. Peter Drucker claims that all successful diversification requires a common core or unity represented by common markets, technology, or production processes. He states that without such a unity, diversification can never work; financial ties alone are insufficient.