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Series:   Elements in Business Strategy

Diversification in the World of Data and AI

Published online by Cambridge University Press:  05 May 2025

Gianvito Lanzolla  and
Constantinos Markides
Gianvito Lanzolla
Affiliation:
Bayes Business School
Constantinos Markides
Affiliation:
London Business School

Summary

The datafication of digital reality and the diffusion of increasingly powerful AI systems have transformed the context within which diversification takes place, resulting in new realities for firms and necessitating new organizational capabilities. Building on their own field research and the existing literature on digitalization and diversification, the authors show how external technological and market changes influence the extent and type of diversification that firms can undertake. They argue that to succeed with digital diversification, new capabilities are needed and that these capabilities are not distributed evenly across firms. Only firms that possess these capabilities will undertake more diversification, with all other firms remaining focused. The authors finally argue that the necessary structures and the appropriate management of business units will differ from those used in the past because the digital context has brought to the fore new problems and risks for diversified firms. These are explored in this Element.
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Keywords

diversificationdata and AIconglomeratesecosystemscorporate organisation

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Type
Element
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Series: Elements in Business Strategy
Online ISBN: 9781009515801
Publisher: Cambridge University Press
Print publication: 31 July 2025

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