diversification

(noun)

A corporate strategy in which a company acquires or establishes a business other than that of its current product.

Related Terms

Examples of diversification in the following topics:

  • Ansoff Opportunity Matrix

    • Diversification - This strategy creates completely new opportunities for the company by creating new products and new markets.
    • Each strategy has a different level of risk, with market penetration having the lowest risk and diversification having the highest risk .
    • Diversification seeks to increase profitability through greater sales volume obtained from new products and new markets.
    • Ansoff pointed out that a diversification strategy stands apart from the other three strategies.
    • Because of the high risk involved with diversification, many marketing experts believe a company shouldn't attempt diversification unless there is a high return on investment and their SWOT analysis makes them feel that they have a chance of succeeding in the new market with a new product.

  • Maturity

    • Brand differentiation and feature diversification is emphasized to maintain or increase market share

  • Marketing by Individuals and Firms

    • Diversification: In this strategy, companies move into multiple lines of revenue generation.
    • Diversification is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm.