Related and unrelated diversification represent extremes of a continuum. Discuss why a firm might want to take a mid-range approach to diversification, as opposed to being purely one or the other.
Firms take midrange approach to diversification as it has risks of getting commoditised and doesnt promote innovation. Moreover excessive diversification also adds compliance and complexity in managing and thus increases overall cists making it difficult to handle and raise cash flows. Thus, midrange diversification helps firms in deviating from strategy and at same time pursue constant innovation and achieve fast mover advantages.
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