<P> There are three types of diversification: concentric, horizontal, and conglomerate . </P> <P> This means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know - how to gain some advantage . For example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers . The technology would be the same but the marketing effort would need to change . </P> <P> It also seems to increase its market share to launch a new product that helps the particular company to earn profit . For instance, the addition of tomato ketchup and sauce to the existing "Maggi" brand processed items of Food Specialities Ltd. is an example of technological - related concentric diversification . </P> <P> The company could seek new products that have technological or marketing synergies with existing product lines appealing to a new group of customers. This also helps the company to tap that part of the market which remains untapped, and which presents an opportunity to earn profits . </P>

Taking new products to new markets is a diversification strategy