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Managing Your Business by Marc A. Price, Michael F. O'Keefe, Scott L. Girard

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CHAPTER IVStrategic Thinking and Acting

 

Diversification vs. Strategic Focus

Diversification is a good thing, right? Well, not always. Here’s why.

WE ALL HAVE HEARD about how diversification—having more than one line of offerings—can spread a business’s risks and raise the odds of success. Giant global businesses do this effectively—think of India’s Tata Group, which manufactures steel but also makes cars, health care products, and many other diverse goods; or General Electric, which is into practically everything.

But there’s a catch. Yours is not a giant global business (yet). So if you are tempted to diversify your offering, be sure you aren’t stretching your business too far. It is too easy to get excited about a new thing to deliver, and ...

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