The document discusses diversification strategy and its evolution over time. It outlines the basic issues in diversification decisions around industry attractiveness and competitive advantage. It then discusses the historical trend of increasing diversification among large companies from 1949 to 1974, before later refocusing on core businesses. The document also covers various motives for diversification like growth and risk reduction, and Porter's three tests that diversification must meet to create shareholder value through synergies. It analyzes sources of competitive advantage from diversification like economies of scope and internalizing transactions.