Question

why does related diversification strategy and unrelated diversification strategy often fail

Answer 1

Related Diversification Strategy - It's a process in which a business introduces more activities for product lines the same as it's existing ones.

Unrelated Diversification Strategy -As the name suggests, in this the company adds unrelated product lines which aren't similar to existing ones to explore new markets.

These might fail often in both the cases like:

Failure of Related diversification strategy -

Some of the reasons are as follows:

Change in Management - Handling employees, promotions, and layoffs.

Overestimation of Benefits.

Failure of Unrelated diversification strategy -

Some of the reasons are as follows:

No appropriate strategic considerations

Distracted company leadership.

Capital investment plan doesn't leverage diversification.