Diversification strategies involve a firm stepping beyond its existing industries and entering a new value chain. Generally, related diversification (i.e., entering a new initiative that has significant similarities with a firm’s existing industries) is wiser than unrelated diversification (i.e., entering a new industry lacking such similarities).
Before writing your initial discussion post, read Tesla’s Entry into the U.S. Auto Industry (Attached)
- Tesla recently engaged in diversification by entering the auto industry. Explain why they made this expansion to their portfolio.
- Do you find the reasoning to be convincing? Explain why or why not in your response.
- Provide one (1) additional example of future diversification the organization could take next. Explain your rationale behind this selection.