Corporate Diversification

        Plus – Core Business Solutions was founded by Victor Acosta on September of 2015. The primary function of the business is consulting, which mainly involves developing business plans. In terms of corporate strategy, Plus is a single business that has low levels of diversification and generates more than 95% of its revenue from one business. Although the firm is in its early years, Plus plans to diversify the business in the near future.

        The majority of Plus’ revenue are generated from clients that seek to start new business operations. More specifically, clients hire the firm to develop a business plan, feasibility and market analysis. Currently, Plus has three main segments that it focuses on: oilfield services, food and beverage (F&B), and automotive retail. Within the past year, the food and beverage segment generates the most revenue, followed by automotive retail and then oilfield services.

        Due to the relatively high volume of business generated from the food and beverage segment, Plus plans to create a separate division or business by the beginning of next year in 2017. This diversification move is projected to not only increase net profits, but increase efficiency as well. The new F&B division will bring on new specialized analysts, but many of the resources will still be shared between the corporate office and the F&B business. For example, through corporate relatedness—the sharing of knowledge and expertise—the marketing specialists at Plus will primarily be responsible for conducting the initial market analysis for the F&B business division.

        By sharing linkages between the businesses, the firm will gradually transition from a single business to a related constrained business diversification. Another business Plus expects to begin next year is the “International Consulting Group.” In the past year, over 60% of revenue was generated from international clients. A management consultant will oversee the International Consulting Group and double the number of employees it currently has in the international segment. The core functions, however, will be consistent with Plus’ standards such as the financial model templates and systems, forming an operational relatedness.