A diversification strategy must avoid adding businesses that place an undue strain on nonfinancial resources such as marketing support, managerial talent, technology and information systems.
What is diversification strategy ?
- When a company wants to grow, it employs a diversification strategy. It is the process of introducing a new product in to the your supply chain to boost profits. These products could be in a new industry segment that your company already operates in, which is known as business-level diversification.
- Diversification is a risk-management strategy used by businesses to expand into new markets and industries and increase profitability. This can be accomplished by introducing new products and services into new markets, attracting new customers, and increasing profitability.
- Diversification seeks to maximize returns by investing in various areas that will react differently to the same event.
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