Definition of Related Diversification

Related diversification can be defined as the expansion of a company’s business or production within an industry that has similarities in its offerings. An expansion to the industry that is alike would be related diversification.


Related vs unrelated diversification:

For a business a related diversification can be a more sensible decision but, is not promised to be a successful decision. On the other hand, an unrelated diversification is the one in which a company enters and expands into an entirely different industry. This type of diversification can become tricky and can even cause the failure of a company.


Example of related diversification: 

A Soda producer like Coca-Cola entering into juice production is related to diversification.

View More Management Definitions