To boost profits the company “Toby’s sports factory” plans to expand its product range. Until now, the company was producing and selling sport shoes and sport clothes. The new strategy aims at adding accessories like sweatbands and gym bags to its current product offer. Which growth strategy is “Toby’s sports factory” planning to pursue?

A type of diversification in which a company acquires or develops new products or services (closely related to its core business) to enter one or more new markets is product-related or concentric diversification. This strategy is based on brand loyalty. Comparable to the example of Montblanc pens and sunglasses, this is exactly the case for the new (closely related) product categories that “Toby’s sports factory” is planning to add to its current product portfolio.