A company can best accomplish diversification into new industries by
A)outsourcing most of the value chain activities that have to be performed in the target business/industry.
B)acquiring a company already operating in the target industry, creating a new business from scratch, or forming a joint venture with one or more companies to enter the target industry.
C)integrating forward or backward into the target industry.
D)shifting from a strategic group comprised mostly of single-business companies to a strategic group comprised of diversified companies.
E)employing an offensive strategy with new product innovation as its centerpiece.

Question

Quizplus · Accepted Answer

Diversification into new industries is best accomplished by acquiring a company already operating in the target industry, creating a new business from scratch or forming a joint venture with one or more companies to enter the target industry. These options provide immediate access to industry-specific knowledge, capabilities, and resources, while also facilitating the development of synergies between the parent company and the new business. Outsourcing value chain activities or shifting strategic groups may not be effective strategies for diversification, while offensive strategies with new product innovations as centerpiece may be too risky and uncertain. Integrating forward or backward can be a viable option, but it may require significant investments in new capabilities and resources, and may not provide immediate benefits.

A Company Can Best Accomplish Diversification into New Industries by