Diversification as a growth strategy means what?

Diversification as a growth strategy refers to the process of a company expanding its operations into different markets or developing new products that differ from its current offerings. This approach allows a business to spread its risk, as it is not solely reliant on one product or market. By entering various market segments or introducing a range of products, a company can increase its revenue potential and enhance its competitive position.

This strategy is particularly effective in mitigating risks associated with market fluctuations or changes in consumer preferences. Diversification helps businesses capitalize on new opportunities, harnessing different aspects of the market to create a more resilient overall strategy.