In a diversification strategy, the firm enters new markets with new products. Thus, diversification is one of these four business strategies that is used by businesses to enter the new markets by introducing new products in the market. The strategies given under the Ansoff Matrix include Market Penetration, Product Development, Market Development, and Diversification. From this, you must have got a hint about what diversification is.Īnsoff Matrix or the product/ market expansion grid is the tool used by firms to analyze and plan the strategies for business growth. The businesses also diversify their investments among the different companies, industries, or assets to prevent and manage risks associated with the single industry, company, or asset. As a result of this, the organizations are required to employ various strategies and tactics to ensure higher growth and success of the organization. We all know that the future is uncertain and the external market factors are amply dynamic with continuous changes that increase risks for the business firms. The profusion of practical examples in the blog will also help you to acknowledge the importance of diversification in business and the decision-making factors that can be considered to diversify the business.

In this blog, we will present to you the different strategies of diversification and the need for diversification of business firms. Diversification helps to avoid the risk of having all eggs in one basket. We need to consider that rather than concentrating the money in a single company, sector, industry, or asset class, the business firms are required to diversify their investments across different companies, asset classes, and industries to manage risk. But do you know that diversification is one of the four main business strategies given by Igor Ansoff? Plus, why do you think that the organizations diversify? We all know that diversification is an important investment strategy used by organizations in the current times. “Diversification and globalization are the keys to the future”- Fujio Mitarai Decision-making factors for diversification.Businesses diversify to ease competition.Businesses diversity to increase profits.Businesses diversity for risk mitigation.An example of diversification - Diversification of SoftBank group.An example of diversification- Diversification of Reliance industries.An example of diversification- Siemens growth strategy.

What is related and unrelated diversification?.

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