Concentric diversification is a type of business strategy where a company acquires or creates new products or services to reach more consumers. These new products and services usually are closely related to the company's existing products and services.

The new product is only connected in a loop-like manner at one or more points in the firm's existing process/technology/product chain. In concentric diversification there are benefits of synergy with the current operations.

However, concentric diversification differs from vertically integrated diversification in the nature of the linkage the new product has with the existing ones.  While in vertically integrated diversification, the new product falls within the firm's current process-product chain, in concentric diversification, there is a departure from this vertical linkage.

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