Diversification via Acquisition: Creating Value

During the past 25 years an increasing proportion of U.S. companies have seen wisdom in pursuing a strategy of diversification. Between 1950 and 1970, for example, single-business companies comprising the Fortune “500” declined from 30% to 8% of the total. Acquisition has become a standard approach to diversification. In recent years the productivity of capital […]

by

Malcolm S. Salter

and

Wolf A. Weinhold

by

Malcolm S. Salter

and

Wolf A. Weinhold

From the Magazine (July 1978)

During the past 25 years an increasing proportion of U.S. companies have seen wisdom in pursuing a strategy of diversification. Between 1950 and 1970, for example, single-business companies comprising the Fortune “500” declined from 30% to 8% of the total. Acquisition has become a standard approach to diversification.

A version of this article appeared in the July 1978 issue of Harvard Business Review.

MS

Malcolm S. Salter is professor of business administration at the Harvard Business School, where he specializes in the strategic and organizational problems of diversified companies. This is his fifth article for HBR.
WW

Mr. Weinhold divides his time between research at the Harvard Business School and management consulting on issues involving corporate strategy, industrial organization, and financial economics. He is coauthor with Malcolm Salter of Diversification Through Acquisition: Strategies for Creating Economic Value (Free Press, 1979) and two HBR articles.

Diversification via Acquisition: Creating Value

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