Should a company pursue an unrelated diversification strategy, the types of companies that make particularly attractive acquisition targets would be
A)struggling companies with good turnaround potential, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects but are short on investment capital.
B)companies offering the biggest potential to reduce labor costs.
C)cash cow businesses with excellent financial fit.
D)companies that are market leaders in their respective industries.
E)companies that employ the same basic type of competitive strategy as the parent corporation's existing businesses.

Question

Quizplus · Accepted Answer

Pursuing an unrelated diversification strategy means that the parent company is looking to enter into a completely new industry or market that is different from its existing businesses. Therefore, it would be advantageous to acquire struggling companies with potential to turn around, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects but lack investment capital. This would minimize the risk of entering a new market while also potentially providing the parent company with a new source of revenue.

Should a Company Pursue an Unrelated Diversification Strategy, the Types