1. Diversification into other businesses merits strong consideration when:
a. The company is faced with diminishing market opportunities and stagnating sales in its principal business
b. It can expand into industries whose technologies and products complement its present business
c. It can leverage existing competencies and capabilities by expanding into businesses where these same resource strengths are valuable competitive assets
d. Diversifying into closely related businesses opens new avenues for reducing costs
e. It has a powerful and well-known brand name that can be transferred to the products of other businesses
2. A company can diversify into closely related businesses or into totally unrelated businesses.
3. There is no tried-and-true method for determining when it is time to diversify. Judgments about diversification timing are best made case by case, according to the company’s own unique situation.
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