CA Inter P6 · Chapter 13 · Question 4 of 11
A garment exporter starts a business making technical textiles for hospitals, using its existing fabric technology, sourcing network and production skills. This move is best described as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Related (concentric) diversification
Explanation
Related or concentric diversification means entering a new business that is linked to the existing one through shared technology, skills, markets or resources. Here the technology and skills are shared, though the product and customers are new. Conglomerate diversification would involve a business with no such link.
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