Retrenching to a narrower diversification base is
A)usually the most attractive long-run strategy for a broadly diversified company confronted with recession, high interest rates, mounting competitive pressures in several of its businesses, and sluggish growth.
B)a strategy that allows a diversified firm's energies to be concentrated on building strong positions in a smaller number of businesses rather the stretching its resources and managerial attention too thinly across many businesses.
C)an attractive strategy option for revamping a diverse business lineup that lacks strong cross-business financial fit.
D)sometimes an attractive option for deepening a diversified company's technological expertise and supporting a faster rate of product innovation.
E)a strategy best reserved for companies in poor financial shape.

Question

Quizplus · Accepted Answer

Retrenching to a narrower diversification base allows a diversified firm's energies to be concentrated on building strong positions in a smaller number of businesses, rather than stretching its resources and managerial attention too thinly across many businesses. This strategy is particularly useful for a company facing competitive pressures in several of its businesses, sluggish growth, and recession. It helps the company to focus and become more efficient in its operations.

Retrenching to a Narrower Diversification Base Is