BCS Foundation Certificate in Business Change Practice Exam

The best description of a related diversification strategy is entering into similar markets that require the same technology. Related diversification involves expanding a company's operations into areas that are closely aligned with its existing business, leveraging shared knowledge, skills, and capabilities, particularly in technology, to create synergies. This approach allows companies to capitalize on their core competencies while aiming for growth and reducing risks by spreading operations over several products or services within a familiar domain.

In this context, related diversification not only strengthens the company’s market position but also enhances its competitive advantage by allowing for better resource allocation, streamlined operations, and improved efficiency. By entering markets that are similar and build upon existing technological strengths, businesses can achieve sustainable growth and minimize uncertainties associated with entering entirely new or unrelated markets.