When a company decides to expand into new industries, it must:
A) develop "multibusiness model" that justifies its entry into different businesses.
B) halt marketing activities in the current industry to avoid being associated with one specific industry.
C) select a new CEO and reappoint the board of directors.
D) create one common business model for all the industries rather than each business unit.
E) avoid talking about ways of increasing profitability in the business model.

Question

Quizplus · Accepted Answer

Developing a "multibusiness model" is necessary to justify the entry into different businesses. It helps the company to articulate its strategic intent, objectives, and principles for entering and competing in different industries. This model helps to identify opportunities for leveraging resources, sharing capabilities, and achieving synergy across different businesses.

When a Company Decides to Expand into New Industries, It