Internal Venturing Is a More Attractive Strategy Than Acquisitions When

question 30

Multiple Choice

Internal venturing is a more attractive strategy than acquisitions when:

• A) entry barriers are high.
• B) exit barriers are high.
• C) a company's business model is based on using its technology or design skills to innovate new kinds of products and enter related markets or industries.
• D) it needs to move fast to establish a presence in an industry, commonly an embryonic or growth industry.
• E) the company must make the huge investment necessary to develop the set of value-chain activities required to make and sell products in the new industry.

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Definitions:

ETFs

Exchange-Traded Funds, which are investment funds traded on stock exchanges, much like stocks.

Turnover Ratio

A measure of how frequently investments or inventory are bought and sold within a given period, indicating the liquidity or activity level.

Average Daily Assets

The mean value of assets held over a specified period, calculated by taking the sum of daily asset values and dividing by the number of days in the period.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.