To best add value, a product-unrelated diversifier needs to focus on:
A)Economies of scale.
B)Centralization.
C) Financial synergy.
D) Cooperative organizational culture.

Question

To best add value, a product-unrelated diversifier needs to focus on:
A)​Economies of scale.
B)​Centralization.
C) ​Financial synergy.
D) ​Cooperative organizational culture.

Quizplus · Accepted Answer

Financial synergy is the best choice for a product-unrelated diversifier as it involves leveraging financial resources and capabilities (e.g. cash reserves, access to capital markets, financial expertise) to invest in and acquire companies in different industries, with the goal of creating value through improved financial performance and returns. This approach allows the diversifier to spread risk, capitalize on market opportunities, and achieve economies of scope, while requiring minimal operational changes or integration.

To Best Add Value, a Product-Unrelated Diversifier Needs to Focus