“We will argue that the long-run value of a related diversification lies not so much in the exploitation of economies of scope (asset amortization) - where the benefit is primarily short-term - but in allowing corporations to more cost efficiently expand their stocks of strategic assets. Relatedness, which opens the way for asset improvement, asset creation and asset fission, holds the key to the long-run competitive advantages of diversification. This means that in most cases, similarities in the processes by which strategic assets are expanded and new assets are created are more important than static similarities between the strategic assets that are the outcome of these processes.”

—  Constantinos C. Markides

Source: "Related diversification, core competences and corporate performance", 1994, p. 150

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Constantinos C. Markides8
Cypriot business theorist 1960

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