Question

what is the advantages and disadvantages of related diversification stratergy

Answer 1

Answer:

Disadvantages: Achieving successful unrelated diversification requires good management skills, closely following each of the business activities and timely identifying and solving even the smallest problems. The greater the number of business activities, the more difficult is the total management task.

One of the key advantages of related diversification is the ability to share key resources across different areas. Key resources and capabilities of the firm can be utilized in a new area – potentially giving the firm a competitive advantage relative to other firms that may not pose comparable resources.