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Definition: Diversification is a business or corporate strategy aiming at selling new products or new services in new markets.
It is one of the 4 growth strategies of the Ansoff Matrix (besides market penetration, product development and market development).
Because both the offering and the market are new, it usually requires a company to acquire new skills and facilities, and is relatively risky. On the other hand, D strategies also can decrease risk, because a large corporation can spread certain risks if it operates on more than one market. D can be done in four ways:
- Horizontal Diversification
- Vertical Diversification
- Concentric Diversification
- Conglomerate Diversification