Related Diversification. Related Diversification is the most popular distinction between the different types of diversification and is made with regard to how close the field of diversification is to the field of the existing business activities. Related Diversification occurs when a company adds to or expands its existing line of production or markets. For this assignment, consider your own company or one that you know well. Assume your company opted to pursue a strategy of related diversification and respond to the following questions.
- What industries or product categories could it diversify into that would allow it to achieve economies of scale?
- Identify at least two or three such industries or product categories?
- Describe the specific kinds of cost savings that might accrue from entry into each?
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