Several disadvantages of diversification are
(1) it is risky,
(2) it is costly,
(3) it requires excellent management skills, and
(4) it requires an elaborate control system.
Some of the advantages of diversification are
(1) it allows a firm to spread risks and resources in more than one area,
(2) it allows a firm to pursue special opportunities in diverse areas, and
(3) it allows a firm to balance counter seasonal sales yearly.
