A related diversification strategy involves building the company around businesses:

Question

Quizplus · Accepted Answer

A related diversification strategy involves building the company around businesses that have strategic fit with respect to key value chain activities and competitive assets. This means that the businesses complement each other and benefit from shared resources, capabilities, and expertise, creating synergies and economies of scope. By aligning the value chain activities of the businesses, the company can achieve efficiencies and competitive advantages that would not be possible if the businesses were independent or unrelated. Therefore, the best choice is A.

B, C, and D are not comprehensive enough to capture the essence of a related diversification strategy. B focuses on the operational aspects of the businesses rather than the strategic fit. C emphasizes the separate value chain activities of the businesses rather than their integration. D highlights the distribution and allocation of resources, which is only one aspect of relatedness. Therefore, these choices are not as accurate as A.

E is not a valid answer format, as it does not specify which choices are correct and why.

A Related Diversification Strategy Involves Building the Company Around Businesses