What is Diversification?

A definition of Diversification

“Diversification is a strategy that involves a company expanding into new markets or products to reduce risk and increase growth potential.”

Diversification in Business Glossary - What is a Diversification?

Business Glossary > What is Diversification?


Examples of Diversification in a Sentence:

Diversification is essential for a balanced investment portfolio.

The business announced its diversification into the tech industry.

Successful diversification helped the company withstand market fluctuations.

Why is Diversification Important in Business?

Diversification is crucial as it helps businesses spread risk and exploit new opportunities. By diversifying, a company can safeguard against market volatility and discover new sources of revenue, making it more resilient and competitive.

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Associated Terms

Here are some associated business terms and synonyms for “Diversification”:

  • Expansion
  • Variety
  • Multi-brand Strategy
  • Market Development
  • Branching Out

GE Diversification

GE has implemented diversification by entering industries such as energy, healthcare, and aviation, beyond its origins in lighting and appliances. This strategy has allowed GE to tap into various market opportunities and sustain growth across different sectors.

Final Notes on Diversification

When considering diversification, businesses should evaluate:

  • The alignment with overall strategy
  • The potential for synergy
  • The costs involved

Understanding these elements can lead to successful risk management and growth.


This has been a definition of Diversification meaning.

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