Do you think the level of diversification can determine how successful a company will be?
There are many different levels and types of diversification, from low to very high diversification. But do you think this has a factor in any way to how successful a company can be? According to the textbook, “Strategic Management: Concepts and Cases: Competitiveness and Globalization,” a company that has low diversification has one company that makes the majority of the company revenue. And when a company has high diversification, there are no links between businesses and one company doesn’t make all the company’s revenue. A company could benefit extremely well from having multiple businesses in unrelated markets, and it could make them extremely successful. However, it could go in the other direction, and they could have many companies that fail. This could be the same thing for a company with low diversification because that one company that they rely on for revenue could make even more than a company with multiple revenue streams, but also could result in a major loss if that one company does fail. Based on this information of diversification from the textbook, do you think there is any relation to levels of diversification and successfulness of a company?