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24 March, 14:42

Which of the following is closely associated with the diversification strategy?

a. Selling modified products to the same customers

b. Entering new markets with little competition

c. Increasing overhead production costs

d. Decreasing the prices of existing products

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  1. 24 March, 16:20
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    Answer: b

    Explanation:

    Diversification strategies are used to expand firms' operations by adding markets, products, services, or stages of production to the existing business. The purpose of diversification is to allow the company to enter lines of business that are different from current operations. When the new venture is strategically related to the existing lines of business, it is called concentric diversification. Conglomerate diversification occurs when there is no common thread of strategic fit or relationship between the new and old lines of business; the new and old businesses are unrelated.

    Diversification is a form of growth strategy. Growth strategies involve a significant increase in performance objectives (usually sales or market share) beyond past levels of performance.
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