Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits.

Question

Quizplus · Accepted Answer

Unrelated diversification is typically pursued when an organization's core industry is not performing well, as it allows the company to spread risk by entering different industries. If the basic industry is experiencing growth, the company might focus on related diversification or expanding within the same industry to capitalize on the growth.

Unrelated Diversification May Be an Especially Effective Strategy When an Organization's