The separation strategy is most appropriate when the merging companies are unrelated industries.

Question

Quizplus · Accepted Answer

The separation strategy, also known as divestiture, is most appropriate when the merging companies are in unrelated industries. This is because when companies merge in unrelated industries, it is difficult to find benefits from synergies and economies of scale. In such cases, it is often better to separate the businesses and focus on their respective strengths. On the other hand, when the merging companies are in related industries, a consolidation or integration strategy may be more appropriate as there may be potential for synergies and cost savings.

The Separation Strategy Is Most Appropriate When the Merging Companies