One substitute for diversification that exists is that instead of obtaining cost or revenue advantages from exploiting economies of scope across businesses in a diversified firm, a firm may decide to simply grow and develop each of its businesses separately.

Question

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This statement is true. Rather than diversifying across different businesses, a firm may choose to grow and develop each of its existing businesses separately, seeking to leverage economies of scale within each business rather than across multiple businesses.

One Substitute for Diversification That Exists Is That Instead of Obtaining