The managers at Acme Corporation decided that their firm needed to diversify because of overall falling sales and lower performance in one sector. How does diversifying compensate for the declining performance in this sector

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Israel5486 Israel5486

31-05-2022
Business

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The managers at Acme Corporation decided that their firm needed to diversify because of overall falling sales and lower performance in one sector. How does diversifying compensate for the declining performance in this sector

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Tundexi Tundexi · Answer 1 · 2022-06-13T17:18:45+02:00

The diversification will compensate for the declining performance in this sector by having higher performance in another sector.

What is a diversification?

This refers to a a business strategy that involves the development of a new product into a new market.

Hence, as the firm needed to diversify because of overall falling sales, it will help the sector by having higher performance in another sector.