Question

Which of the following is the best example of unrelated diversification? A. PepsiCo acquiring Tropicana and Procter & Gamble acquiring Gillette B. Honda diversifying into the production of lawnmowers C. Smuckers acquiring Jif peanut butter and Crisco (from Procter & Gamble) D. Verizon Wireless acquiring Amazon.com E. Harley Davidson acquiring the motorcycle business of Honda.

Answer 1

Following should be considered related diversification :

Pepsico/ Tropicana : Both in drinks business

Honda/ Lawnmowers : Both driven by engine/motors of different sizes

Smucker/ Jiff peanut butter : Both in jam / peanut butter business

Harley Davidson/ Motor cycle business of Honda : Motor cycle business

Following therefore should be example of unrelated business diversification . Verizon offers wireless products and services whereas Amazon.com is an ecommerce company.