Critically assess the idea that diversification is always a growth driver ?
Pros of Diversification:
Revenue Streams: New products/services reduce dependency on one offering.
Market Expansion: Entering new sectors can grow brand influence.
Risk Mitigation: Losses in one area may be balanced by gains in another.
Cons:
Loss of Focus: Spreading too thin may dilute core competencies.
Operational Complexity: Managing different markets or products adds complexity.
Brand Confusion: Customers may not understand what the brand stands for.
High Costs: Developing and launching new offerings requires heavy investment.
Conclusion: Diversification can be powerful when strategically aligned, but reckless or forced diversification can lead to failure.
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