Diversification growth strategy involves which combination of markets and products?

• A. Existing markets, existing products
• B. New markets, existing products
• C. Existing markets, new products
• D. New markets, new products

Answer: (D)

Diversification is growth by moving into new products for new markets. It means expanding beyond what you currently offer and who you currently serve, aiming for fresh revenue streams in unfamiliar territory. This is different from growing within the same market with the same products (market penetration), growing in a new market with existing products (market development), or growing with new products in the same market (product development). Diversification carries higher risk because both the product and the market are new, but it also offers the greatest potential for substantial growth if the new combination resonates with customers.