Risk diversification works by spreading investments and operational focus across different sectors. Here are a few ways businesses can diversify:
Geographic Diversification: Expanding operations into different regions or countries to avoid local economic downturns. Product Diversification: Offering a variety of products or services to cater to different market segments. Financial Diversification: Investing in a mix of stocks, bonds, and other financial instruments. Supplier Diversification: Sourcing materials from multiple suppliers to avoid disruptions in the supply chain.