Definition: is a company, which has, operates, and/or invests in multiple businesses that are unrelated to each other and belong to different markets or industry fields. A diversified firm may use different channels of distribution for each separate business, apply various management methods and expertise, have different customers, provide different types of services, and produce various products. Because a diversified firm is not mainly focused on only one business and its processes, it may be challenging for the shareholders of such a company to gain significant profits. However, their losses in case of a disaster aren’t that significant either given the fact that the businesses of a diversified firm usually belong to different categories and the failure of one of them does not typically influence the rest of the businesses.
In a Sentence:
Diversified firms allow for more opportunities for employment since they operate in different businesses and industry areas at the same time.
Even though it might be a bit challenging to gain significant revenue when owning a diversified firm, you are still able to generate a lot of profit thanks to the number of clients and the revenue base.
In a diversified firm, when one of your investments goes down, the rest of them are not affected, which makes your position more secure.
Synonyms and related words: diversified company, corporate strategy, conglomerates sector, diversification of business, diversification