1. avatar says

    According to Opentuition text, chapter 11 (Ansoff’s Matrix), the ”most risky” option is diversification. From what I learnt from F9, diversification reduces risk. There is contradiction here. May someone explain to me what’s happening here

    • avatar says

      Yea diversification reduces risk.However a company sholud leave diversification in the hands of shareholders.The shareholders of a company can reduce risk by investing in different companies. So a company should rather focus on improving its business to give shareholder high returns. Not investing in different businesses cos in the end they might not have the needed capabilities and rsources to efficiently manage those busineses. They then become jack of all trades but master of none

      • avatar says

        Thanks Missmorkor22 for the explanation. You are right. I took diversification from the shareholders’ point of review.

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