I don't think it necessarily means the whole company will fail, but over time, large companies become more risk-averse which opens up room for smaller, nimble companies to gain market share. Tesla being a great example of this. Hell, Google itself came up this way.

There is also another factor that isn't discussed as much and that's when companies become spread too thin. When a large company attempts to compete in every market, it will be increasingly difficult to be competitive in any of them. Yahoo is a great example of this, they spread themselves too thin, they didn't do any one thing better than others, and over time they were overtaken by competitors.