Question

A noted professional art academy has founded an "artists and friends" travel company specializing in tours for artists to scenic locales, using its faculty as traveling teachers. In addition, the art academy has purchased a framing company to make frames for academy art works, and to sell museum-quality framing services to the public. The art academy is engaging in diversification based on __________ relatedness.

Answer 1

The art academy is engaging in diversification based on "Operational" relatedness.

Explanation:

Operational relatedness is the sharing of activities or operations in business. Here art academy founded something beneficial for them in "artists and friends travel" company, as the company is specialized in tours for artists, by having different guides or travelling teachers.

Thus the academy found beneficial is purchasing framing sector, in order to implement in their art works of framing and develop service sector from museum side, overall they are diversifying their business.