Multiproduct firms must take strategic decisions at the corporate, business, marketing and sales levels. Business strategy decisions determine how each business unit plans to compete effectively within its industry.
Diversification may deliver a multiproduct company some advantages compared to specialists. For example, a conglomerate may cross-subsidies some activities at the expense of other activities.
Mutual forbearance indicates that multiproduct firms do recognized that their own products have to compete with other multiproduct firms on several markets. When they see this is the case, they may be inclined to compete less severely with other multiproduct firms and some form of oligopoly may rise.
Products in the multiproduct firm are often interrelated. Some products may be purchased by a common set of customer: alternatively, other products may share common production or other resources (e.g., these products may be sold through a common sales force).
Multiproduct firm
