Chapter 8, Problem 2DQ

Summary Introduction

To determine:

Why and how should a management team go about determining if the company needs to diversify?

Introduction:

Diversification is a company growth option; the business could diversify into a completely new market or product as a strategy to expand the business. However, this entails high risk and high rewards. New products, new markets, different advertising modes, different operation procedures will have to be followed usually when this takes place.