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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › Diversification – increases or reduces risk?
Sir am getting really confused around this idea of ‘diversification’ now!
Diversification as per Ansoff matrix is venturing into new markets and introducing new product, which is clearly the riskiest strategies compared to product development, market development and market penetration.
However, the conventional idea of diversification (don’t put all your eggs in same basket) says that it helps reduce risk…
So now I am left scratching my head, wrt this idea of ‘diversification’
Many thanks in advance!
If diversification succeeds risk is lowered, but the road to successful diversification is perilous.