The Reasons for diversification is:

A. to reduce competition

B. to increase organizational capabilities

C. to get tax advantage

D. to get quick entry into a business

Answer: Option B

Solution(By Examveda Team)

The Reasons for diversification is to increase organizational capabilities. Diversification strategies are used to expand firms' operations by adding markets, products, services, or stages of production to the existing business. The purpose of diversification is to allow the company to enter lines of business that are different from current operations.