It becomes particularly urgent for a company to consider diversification when there are needs to avoid putting all of its "eggs" in one industry basket. diminishing market opportunities and stagnating sales in its principal business.

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23 February, 13:09

It becomes particularly urgent for a company to consider diversification when there are needs to avoid putting all of its "eggs" in one industry basket. diminishing market opportunities and stagnating sales in its principal business.

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Madilyn Stanley · Answer 1

The answer to this question is diminishing market opportunities and stagnating sales in its principal business.

Companies should only consider diversification if the previous product that thye make is already succesful and they have enough capital to pursue another segment of the market. If the sales is still stagnant, it best to use the capital to reinvest in the current product until the growth is assured. (or even just stop the production for that product and start pursuing another)