Scenario 3-2
Giorgio Armani, the Italian fashion group, announced plans to launch a $1 billion international luxury hotel chain containing ten hotels and four resorts before the end of 2015. This will allow the company to both take advantage of an international trend toward luxury lifestyle consumerism and achieve its growth objectives.
-Refer to the scenario. Since this was Armani's first venture into the hotel industry, what would it be an example of?

Question

Quizplus · Accepted Answer

Armani's entry into the hotel industry is an example of diversification, which involves expanding into new and unrelated markets to reduce risk and achieve growth objectives.

Scenario 3-2 Giorgio Armani, the Italian Fashion Group, Announced Plans to Launch