Diversification in business operations refers to what?

Diversification in business operations is characterized by a company's strategy to expand into another industry or market segment. This strategic move allows businesses to spread their risk and not rely solely on a single product or market. By entering new areas, companies can potentially increase their revenue, tap into new consumer bases, and protect themselves against fluctuations in their primary market.

This approach often helps businesses mitigate risks associated with market saturation or economic downturns in a specific sector, as they are not solely dependent on one line of products or services. Diversification can take various forms, including developing new products, acquiring businesses in different industries, or entering new geographic markets, thus enhancing overall business strength and resilience.