Palich, Cardinal, Miller (2000) Flashcards by Lex van der molen | Brainscape

Q

Single, related vs unrelated diversification
U-shaped model assumes (SUP):

A

Focused businesses do not enjoy scope economies: marketing, production, r&d etc.
Not only benefits result to diversification: top management strain, internal inefficiencies, increased coordination costs, incompatible technologies
Marginal costs of diversification increase rapidly

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