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Related diversification in product development is when a company develops a new product that has synergies with its existing products. For example, a smartphone company developing a new camera app. This is related because the new product (camera app) is related to the existing product (smartphone) and can leverage the same technology and customer base.
Unrelated diversification, on the other hand, is when a company develops a new product that has no synergies with its existing products. For example, a taxi service company launching a new shoe brand. This is unrelated because the new product (shoe brand) has no connection to the existing product (taxi service) and does not leverage the same technology or customer base.
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Ansoff's matrix, also known as the product/market expansion grid, can be used to plan product growth strategies. Diversification and marketing strategies are separated into related and unrelated technology groups. Related means there are synergies between new and existing products, while unrelated has no such synergies. For instance, a phone company that develops a camera would be a new related product with synergy to the company's existing product, while an example of an unrelated product would be a taxi service that launches a new shoe brand. (Slide 25)
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How do you stay innovative and provide the right values for customers? Effective product development allows companies to sustain, grow, and thrive in ...
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