Diversification merits strong consideration whenever a single-business company has competitively weaker resources and capabilities than the industry's market share leader. needs to increase its net profit margins and return on investment. has become the low-cost provider in its current line of business and needs to move on to other challenges. has tried unsuccessfully to achieve a sustainable competitive advantage in its present business. encounters worsening industry conditions that are expected to be long-lasting and adversely impair its prospects for continued good performance