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Most of the strategic choices of successful corporations have a central economic logic that serves as the fulcrum for profit creation.

The most common growth strategies are diversification at the corporate level and concentration at the business level.

The primary reason a firm pursues increased diversification are value creation through economies of scale and scope, or market dominance.

In some cases firms choose diversification because of government policy, performance problems and uncertainty about future cash flow.

Managers respond by selecting corporate strategies that redirect their attempt to turnaround the company by improving their firm’s competitive position or divest or wind up the business if a turnaround is not possible.

Turnaround strategy is a form of retrenchment strategy, which focuses on operational improvement when the state of decline is not severe.

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