When an organization expands into a totally new line of business, it is implementing a strategy of __________ diversification.
A) related
B) unrelated
C) cross-functional
D) product line
E) industry

Question

Quizplus · Accepted Answer

When an organization expands into a totally new line of business, it is implementing a strategy of unrelated diversification, as it is entering a market or industry that is completely distinct and unrelated to its existing business operations. Related diversification involves entering a market or industry that is related or connected to the organization's current line of business, while cross-functional diversification involves developing new products or services that complement the organization's existing products or services. Product line diversification involves expanding within the same industry with new product lines, while industry diversification involves entering a new industry with existing products or services.

When an Organization Expands into a Totally New Line of Business