A strategy tax is the price you pay for being loyal to more than one thing.

Examples:

• Microsoft makes an operating system (Windows) and a database server (SQL Server). MS chooses not to port the database server to other OS's, because it is loyal to its Windows product.
• Monarch Avalon was both a board game publisher (Avalon Hill), and a paper products publisher (Monarch Publishing). The company made its board game end buy more expensive paper publishing from the paper end.

If the company executes correctly, it realizes "synergy" and everyone in the company in better off. If it does not, both divisions can become uncompetitive.