ABSTRACT
Diversification occurs naturally in the context of growing a business. Diversification can be stimulated by many other factors, such as the occurrence of unexpected opportunities or threats, the dynamics of competition, the pressure of the stock market or government pressure and extra. Diversification can be through acquisition or internal development diversification, although internal development is carried out using the internal resources of the company as a basis for new activities. This kind of diversification requires an explicit strategy, dynamic and fruitful research and development activities, an organizational capacity to protect and develop new activities, and a lot of time. Diversification through mergers and acquisitions can save time in a business or it can reduce the cost of entry into a new industry. Diversification by internal development cannot be the solution when the situation is stable, and there is no way in the replacement market, which provides quick access to the desired growth in the desired areas.
