There are a number of risks, including:

- Losing focus: As companies diversify across other sectors, or products, they lose focus on their core products - in competitive markets this can be a recipe for losing market share

- Increasing risk: As companies enter new markets, the inherit the risks associated with the new product / sector e.g. might include a credit card company diversifying into foreign exchange, increasing their risk to currency fluctuations

- Impeding innovation: Many argue focus on core products allows companies to excel at innovation - diversifying spreads the businesses innovation capabilities