Unlike market penetration, diversification is not profitable when a firm enters markets with prominent competition.

Question

Quizplus · Accepted Answer

Diversification can still be profitable even in markets with prominent competition if the firm can offer unique or innovative products/services, or if it can gain a competitive advantage through cost leadership or differentiation. However, entering such markets may also involve higher risks and require significant investments and resources.

Unlike Market Penetration, Diversification Is Not Profitable When a Firm