Diversification Benefits
Advantages of operating in multiple markets/products.
Formula
Risk Reduction = 1 − (Revenue concentration in one market)
Real World
Virgin Group operates across airlines, gyms, media, and space travel — when COVID-19 devastated Virgin Atlantic, revenues from Virgin Media helped offset the losses.
Exam Focus
Always weigh spreading risk against the risk of losing focus; one-sided diversification answers rarely reach the top mark band.
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