Most companies first consider diversification when they are generating financial resources in excess of those necessary to maintain a competitive advantage in their original business or industry.

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Diversification typically occurs after a company has established a strong financial foundation in their original business or industry. When a company has excess financial resources, they may choose to diversify by entering a new market, expanding their product offerings, or acquiring other companies to create a more diversified portfolio.

Most Companies First Consider Diversification When They Are Generating Financial