Question

The corporate portfolio strategy includes three types of diversification:

1. ________________________

2. ________________________

3. _________________________

Answer 1

Diversification is the process for enlarging the company's operations or varying the product's range. So the company makes strategic decision to enter into a new market or industry and is a risk management technique.

The three corporate portfolio strategy include: -

• Horizontal diversification occur when new products or services are added to the company that is unrelated to current product however it will attract the existing market.
• Concentric diversification is nothing but business strategy where company focus on reaching more consumers by creating new products or services which are closely related to company's existing products or services.
• Conglomerate diversification is nothing but the strategy where the business add new products or service that is different from the company's existing products or service.