Combination Related-Unrelated Diversification Strategies


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Combination Related-Unrelated Diversification Strategies

1.   There is nothing to preclude a company from diversifying into both related and unrelated businesses.

2.   Indeed, in actual practice the business makeup of diversified companies varies considerably:

a.   Dominant-business enterprises – one major core business accounts for 50 to 80 percent of total revenues and a collection of small related or unrelated businesses accounts for the remainder

b.   Narrowly diversified – 2 to 5 related or unrelated businesses

c.   Broadly diversified – wide ranging collection of related businesses, unrelated businesses, or a mixture of both

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