It is true that when the combined firm lost significant sales and destroyed a significant amount of shareholder value is an example of a failed diversification effort.
What is a failed diversification effort?
A failed diversification effort refers to a situation whereby the attempt to diverify the firm failed, leading to a loss.
The main reasons that diversification fails is because the businesses do not have the right strategy in place.
In conclusion, the firm has experienced a failed diversification effort because of the failure.
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