Strategic alliances are generally viewed as a poor substitute for diversification since the economies of scope in diversification can be found in strategic alliances.

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Strategic alliances and diversification are two different strategies that serve different purposes. Diversification involves expanding into new markets or industries, which can result in economies of scope by sharing resources and capabilities across different business units. Strategic alliances, on the other hand, involve partnering with other companies to achieve specific goals or access new markets. While strategic alliances can offer some benefits, they are generally not seen as a substitute for diversification, as diversification offers a more comprehensive and sustainable approach to growth and risk management.

Strategic Alliances Are Generally Viewed as a Poor Substitute for Diversification