Ainsworth is a toy manufacturer based in Australia. Which of the following most likely indicates that Ainsworth is following a diversification strategy?
A) Ainsworth increases its spending on advertising and promotion.
B) Ainsworth acquires the rights to manufacture toys resembling a popular cartoon character.
C) Ainsworth introduces its toys in the Indian and South-East Asian markets.
D) Ainsworth enters the U.S. market with a line of children's clothing.
E) Ainsworth develops a new line of educational toys targeting its current market.

Question

Quizplus · Accepted Answer

Diversification strategy involves entering into a new market or industry which the company is not currently in, while also creating a new product for that new market. Choice D, where Ainsworth enters the U.S. market with a line of children's clothing, indicates a move into a new product category (children's clothing) and potentially a new market (U.S.), which aligns with a diversification strategy.

Ainsworth Is a Toy Manufacturer Based in Australia