Research comparing concentric with conglomerate diversification concludes that
A) conglomerate diversification is always less profitable than concentric diversification.
B) concentric diversification is always less profitable than conglomerate diversification.
C) the relationship between relatedness and performance follows an inverted U-shaped curve.
D) neither concentric nor conglomerate diversification are ever profitable.
E) for optimum effectiveness both conglomerate and concentric diversification should be utilized in tandem.

Question

Quizplus · Accepted Answer

Research has found that the relationship between relatedness and performance follows an inverted U-shaped curve, meaning that both too much and too little relatedness can lead to lower profitability. Therefore, neither concentric nor conglomerate diversification can be said to always be more profitable than the other. It depends on the specific circumstances and level of relatedness involved in each strategy.

Research Comparing Concentric with Conglomerate Diversification Concludes That