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Diversification - Related and Unrelated Diversification

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Diversification is a corporate-level strategy that can create value for an organization.

What are the differences between related and unrelated diversification?
Why would an organization select a related or unrelated diversification strategy over the other? Explain with examples of related and unrelated diversification.

Please site at least 1 reference

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What are the differences between related and unrelated diversification?


Related diversification occurs when a business adds or expands its product lines or markets. That is, the business continues selling similar products or providing similar services to new clients or customers. For instance, a furniture store can expand its operations by purchasing another furniture store in a different city. This would be considered to be related diversification.


Unrelated diversification occurs when a business expands by adding new, or unrelated, product ...

Solution Summary

The differences between related and unrelated diversification is given. What an organization should consider before deciding which type of diversification it should pursue is examined.

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Strategies of Related and Unrelated Diversification

1. Carefully explain the difference between a strategy of related diversification and a strategy of unrelated diversification.

2. What is meant by the term strategic fit? What are the advantages of pursuing strategic fit in choosing which industries to diversify into?

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