Please read this paragraph and answer the question.

IBM has been a leading name in computers for decades. With a newly developed technology, IBM is leveraging its competencies to diversify into the healthcare industry. By adapting its expertise to the healthcare environment, it is seeking to provide a unique and valuable service for customers. Diversification can come in many forms. IBM has found a way to relate its computing expertise to the healthcare industry. This case focuses on how IBM has been able to make this market entrance. Read the case below and answer the questions that follow. Watson, the supercomputer IBM used to win a competition against the best players on the quiz show Jeopardy!, is now working toward becoming Dr. Watson. Over the decades, IBM has developed strong competencies in raw computing power. With Watson, a computer named after IBM founder Thomas J. Watson, IBM engineers, and scientists set out to extend their competencies by building a computing system that can process natural language. Their goal was to build a system that could rival a humans ability to answer questions posed in natural language with speed, accuracy, and confidence.

They took four years to develop the system and demonstrated its capabilities in beating two of the greatest champions of Jeopardy! in 2011. In 2012, with great fanfare, the marketing people at IBM blasted the airwaves with news of IBMs new venture. Watson was going to help solve problems in health care faster and, reduce cost, and improve outcomes. IBM went big, focusing first on oncology and partnering with a large health system to implement the new system. It has chosen to work initially on cancer treatment since the volume of research on cancer doubles every five years. As a result, it is very difficult for oncologists, the doctors treating cancer to keep up with all of the medical advances. That is not a problem for Watson. IBM feeds massive amounts of data from hundreds of thousands of medical studies into Watson and updates the database as new research becomes available. Watson, which can analyze 66 million pages of data a second, has no trouble keeping up. In its training phase, doctors assess Watsons answers and indicate whether they believe they are correct. This allows Watson to improve its decision-making moving forward. It all seemed so simplewhat went wrong? Health care is a high-stakes business, and failure of a product to deliver intended results can lead to the loss of life.

The press eagerly picked up the reports that Watson made mistakes, and they were followed by leaked internal memos suggesting that Watson was struggling to deliver on promised results. Artificial intelligence (AI) is a new area, and the technical people understand AI really well, but did the executive team at IBM? It seems this was a great technology strategy but not as a great a business strategy because the product was not well understood. You cannot delegate business strategy to the techiesyou might get something really cool, expensive, and unprofitable. AI does some things really well, and it cannot do other things at all. Implementing AI strategically demands a new vision that integrates human capabilities with the capabilities of AI in new and exciting ways. It is folly to play with peoples lives before you are ready.

With Watson, IBM aimed to dominate a critical area of the economy and failed to restrain the marketing team hungry to hype Watson. The strategic choice is excellent, but execution was horrendous and poorly timed. Watson is the future; it is just that the future isnt here yet! Using Watson, IBM has teamed up with WellPoint to enter the healthcare industry.

What type of diversification is this an example of?