Question

A concentric diversification strategy is a strategy

a. an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions
b. used to add new businesses that produce unrelated products or are involved in unrelated markets and activities
c. used to add new businesses that produce related products or are involved in related markets and activities

Answer 1

A concentric diversification strategy involves a company adding new, related business ventures to leverage its existing core competencies, potentially reducing costs and increasing efficiency.

Step-by-step explanation:

A concentric diversification strategy is a business approach where a company adds new products or services that are related to its existing product lines and can benefit from the company's current strengths and capabilities. This strategy is often utilized to achieve competitive advantage by leveraging the firm's core competencies in related markets. Option C is correct, as a concentric diversification strategy is used to add new businesses that produce related products or are involved in related markets and activities.

Companies choose this strategy as a way to grow and take advantage of synergies. These synergies may come in the form of shared technology, marketing, research and development, or distribution channels which can strengthen the overall portfolio of the company, potentially reducing costs and increasing efficiency.