Concentric Diversification

Concentric diversification is a business strategy where a company expands its product line or services by adding new items that are related to its existing offerings. This involves leveraging current strengths, such as technology, expertise, or market knowledge, to create products that appeal to the same customer base or enhance the existing brand. For example, a smartphone manufacturer might start producing smartwatches. This approach allows businesses to tap into new markets while minimizing risk, as they build on what they already know well. It aims to increase profitability by attracting more customers or encouraging existing customers to buy more.