When a company enters a new business in a different industry from that in which it currently operates and does not expect to achieve any value chain synergies, this is ________ diversification.

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28-03-2022
Business

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When a company enters a new business in a different industry from that in which it currently operates and does not expect to achieve any value chain synergies, this is ________ diversification.

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akposevictor akposevictor · Answer 1 · 2022-04-04T21:10:40+02:00

When a company enters into a new business that is unrelated without expecting to acheive any value chain synergies, it is can be referred to as: unrelated diversification.

What is Unrelated Diversification?

Unrelated diversification can be described as a type of diversification whereby a company ventures into unconnected business areas where the opportunities for sharing resources between areas do not exist.

An example of unrelated diversification is Amazon venturing into grocery store business which involves the purchase of whole foods.

Therefore, when a company enters into a new business that is unrelated without expecting to acheive any value chain synergies, it is can be referred to as: unrelated diversification.

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