Diversification becomes a relevant strategic option in all but which one of the following situations?
A) When a company spots opportunities to expand into industries whose technologies and products complement its present business.
B) When a company is only earning a low profit margin in its principal business.
C) When a company has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses.
D) When a company can open up new avenues for reducing costs by diversifying into closely related businesses.
E) When a company can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.
Correct Answer:
Verified
Q2: The three tests for judging whether a
Q5: The cost-of-entry test for evaluating whether diversification
Q7: To create value for shareholders via diversification,
Q7: Diversifying into new businesses is justifiable only
Q8: Establishing investment priorities and steering corporate resources
Q13: Diversification ought to be considered when:
A) a
Q14: Creating added value for shareholders via diversification
Q15: Diversification merits strong consideration whenever a single-business
Q18: To test whether a particular diversification move
Q18: The decision to pursue diversification requires management
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