What Is Unrelated Diversification?

The term "unrelated diversification" refers to the manufacture of various products that are not related to each other in any way. An example of unrelated diversification is a shoe business that also manufacturers industrial wiring.

In economy, it is considered that any new company or business that has potential for high revenues and can be purchased under favorable circumstances is suitable for diversification. The unrelated diversification is often based on the available resources of a certain company that can be used in a completely unrelated field. Unrelated diversification can be achieved by expanding to new markets using existing resources or by developing new competences for new market opportunities.