Related diversification
Related diversification expands into activities that share useful resources, capabilities, technologies or market connections with the existing business. Potential synergies need evidence and active coordination; relatedness does not eliminate risk. The label horizontal diversification is sometimes used for competitive or complementary activities in a related-growth classification, but terminology varies. An Ansoff analysis must separately assess whether the products and markets are new.
Worked example
A domestic-appliance producer enters commercial cleaning equipment, using engineering knowledge and some components but developing different customer and service capabilities. The shared resources offer potential benefits without guaranteeing success.
Common mistake
Repeating the legacy claim that horizontal growth necessarily means unrelated new markets, or confusing any diversification with simply acquiring a competitor in the existing business.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Direct | September 2026–June 2027 |