Strategic Management Questions: Why can too much diversification hurt company performance?
Strategic Management Questions: Why can too much diversification hurt company performance?
Homework Answers
Too much diversification hurt company performance in the following ways -
1) Increases Internal coordination cost - If diversification is not performed properly or the outcomes or diversification are not suitable, it might increase the internal coordination cost, which may affect the organization's performance.
2) It affects quality - If you perform diversification, it will lead to transfer your concentrate at the new product or service, affecting the performance and quality of the existing products.
3) Harming the existing products - High level of financing and investment is required for the diversification. A huge risk is involved with it. If it does not succeed, it will also affect the existing product badly.
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Strategic Management Questions: Why can too much diversification
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