Final answer:
The least risky path to expand a bamboo toy business is by expanding the market to more states, selling the same product. Related goods like bamboo furniture offer a moderate risk, while unrelated goods and purchasing a new business represent higher risks. So the correct answer is option 1.
Step-by-step explanation:
When considering the expansion of a business that sells hand-made, environmentally friendly bamboo toys, the least risky path would likely be option 1: trying to expand your market to more states, selling more of the same product. This option allows the business to leverage its existing production methods, supply chains, and market knowledge while reaching a broader customer base without the complexities of new product development or the risks associated with entering completely unrelated markets.
Expanding your product line to include related goods, like bamboo furniture (option 3), could also be a viable path as it builds on the company's experience with bamboo materials. However, this still introduces new challenges associated with designing, manufacturing, and marketing new types of products. In contrast, more considerable risk is involved in expanding to offer unrelated goods like leather clothing (option 2) or purchasing an unrelated business (option 4) as those would require new expertise, additional resources, and potentially divert focus from the core business.
Long term, businesses are capable of larger scale expansions such as opening new factories, hiring workers, or starting to sell new products. However, these actions come with increased risk and complexity compared to simply expanding the market for existing products.