What is diversification?

What is Diversification?

Diversification strategy is pursued when good opportunities exist outside the present business domain of the company. Related diversification is adding new but related products or services. E.g. Google which started its services as a search engine acquired the web-site You-tube which contains many video clips and TV commercials.

Unrelated diversification is adding new but unrelated products or services. E.g. Ford Motor entered industrial bank business.