Diversification involves:

• A. Main aim is to increase market share with existing products within existing markets
• B. New products, new markets
• C. Aims to increase sales by taking the present product to new markets
• D. Focuses on developing new products for existing markets

Answer: (B)

Diversification is a growth approach that expands a business into entirely new products and entirely new markets. It aims to move beyond the current range of offerings and the current customer base. That’s why the option describing new products in new markets is the best fit. The other possibilities describe related but distinct strategies: expanding the same product in the same market is market penetration; creating a new product for the same customers is product development; and taking an existing product into new markets is market development. Diversification often involves higher risk due to unfamiliar customers and capabilities, but it also opens opportunities for spreading risk and achieving new growth.