When Clorox corporation, the manufacturer of bleach and bleach-based cleaning products, acquired Kingsford charcoal and prime choice brand steak sauce, it was an example of unrelated diversification.
What are unrelated diversification strategies?
A corporation pursuing expansion in product marketplaces when the primary success criteria are unrelated to one another is known as an unrelated-business-diversifier. Such a business, whether it be a holding company or a conglomerate, anticipates little to no functional talent transfer between its numerous subsidiaries.
What are the risks of unrelated diversification?
Diversification into unrelated industries has the additional drawback of possibly fostering divisional politics. For instance, there can be disputes about how to allocate the company's limited financial and other resources, with several divisions competing for control of them.
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