Background Note | HBS Case Collection | April 2005 (Revised April 2005)

Strategies of Related Diversification

by Bharat N. Anand

Abstract

Which businesses should a firm expand into? This question of corporate scope is central to corporate strategy. Flawed scope decisions can have severe consequences, and the trauma experienced by many companies as a result of mistaken decisions to expand scope is often large. What leads to such mistakes? Where do managers go wrong? And, what might be a sensible logic by which to approach the question of scope expansion? Examines these questions and the logic of the scope decision in those instances where the target business is ostensibly related in some way to a company's existing ones.

Keywords: Diversification; Business Conglomerates; Corporate Strategy; Problems and Challenges;

Citation:

Anand, Bharat N. "Strategies of Related Diversification." Harvard Business School Background Note 705-481, April 2005. (Revised April 2005.)