Diversification Strategy and Business Groups

The aim of this article is to examine recent developments in the strategies of diversified business groups. It assesses the business group strategy by focusing on two prominent areas of growth: product diversification and geographic diversification. It thus attempts to identify the ways in which these strategies have been developed by business groups in the last decade of the twentieth century and the first decade of the twenty-first. The main focus of this article is diversification, rather than other strategic issues, although these are clearly interrelated elements. Also, as it deals with business groups at the turn of the century, these groups are often operating in business environments where liberalization and privatization are part of the main goals of policy-makers, which contrasts with developed-country markets, where the institutional underlay of competitive markets has been a feature of these economies for a much longer period.