The managers at AHL Chemicals Inc.decided that their firm needed to diversify because of falling sales and lower performance in one sector.How does diversifying compensate for the lackluster performance in this sector?

Question

Quizplus · Accepted Answer

Firms often attempt to reduce risk by diversifying their product and service portfolio through competing in a number of different industries. The rationale behind these diversification moves is that falling sales and lower performance in one sector might be compensated by higher performance in another.

The Managers at AHL Chemicals Inc