Amer Group is the world's leading manufacturer of tennis racquets, golf clubs, and Alpine skis with its Wilson brand tennis racquets and golf clubs as well as its Atomic brand ski. It also produces and sells cigarettes in Finland where it has a 75 percent share of the market. (It is licensed by Phillip Morris to produce the Phillip Morris brands in Finland.) In addition Amer Group owns Precor, a leading supplier of fitness equipment to gyms, health clubs, and private customers in the United States. A healthy cash flow from its tobacco unit allowed the conglomerate to specialize in sporting equipment. In 2002, it decided to get out of the tobacco business because it did not fit with the image of a sporting equipment supplier.
-In terms of the product-market growth matrix, the addition of a cigarette division would have been an example of:

Question

Quizplus · Accepted Answer

The addition of a cigarette division by Amer Group, a company primarily known for sporting equipment, represents diversification. This is because the company expanded into a new market (tobacco) that is unrelated to its core business of sports equipment.

Amer Group Is the World's Leading Manufacturer of Tennis Racquets