When a company in industry A acquires a company in industry B,Porter's "better-off" test is satisfied when:
A)The competitive advantage of the business B is increased
B)The competitive advantage of business A is increased
C)The competitive advantage of either or both businesses in increased
D)There are shared resources and capabilities between the two businesses

Question

Quizplus · Accepted Answer

Porter's "better-off" test is satisfied when the acquisition results in an increase in the competitive advantage of either or both businesses involved. It is not necessary that only the competitive advantage of one business must be increased, but it can also be the case that both businesses benefit in terms of increased competitiveness. Thus, option C is the best choice. Options A and B are partially correct, but they do not capture the full scope of the test. Option D is not relevant to Porter's "better-off" test.

When a Company in Industry a Acquires a Company in Industry