Research into Diversification Has Shown That

question 50

Multiple Choice

Research into diversification has shown that:

• A) Related diversification outperforms compared to specialisation and unrelated diversification.
• B) Diversification is too risky and always fails.
• C) Related diversification underperforms compared to specialisation and unrelated diversification.
• D) The performance of conglomerates is consistently good over long time periods.

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Definitions:

Product Differentiation

The technique of making a product or service stand out from others in the industry to appeal more to a chosen target market.

Barriers To Entry

Factors that prevent new firms from entering and competing in imperfectly competitive industries.

Market Share

The proportion of the total sales or output produced in a market by a single company, often used as an indicator of competitiveness.

Behavioral Economics

A field of economics that examines how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions.