Reviewing portfolio strategy

In our work on corporate-level strategy we have often claimed that many, if not most, large corporations are over-diversified. This, we claim, accounts for the popularity of MBOs, LBOs, spinoffs, demergers, unbundling and many other ways of reducing diversification. This article explains, in the form of a letter to a fictitious chief executive, why some forms of diversification lead to value destruction while other forms lead to value creation.