A Company Should Pursue Related Diversification Instead of Unrelated Diversification

question 75

Multiple Choice

A company should pursue related diversification instead of unrelated diversification when

• A) the company's core skills create value by resource sharing and by transferring competencies between businesses.
• B) the company's core skills are highly specialized and have few applications outside the core business.
• C) the company's top management is skilled at acquiring and turning around poorly run enterprises.
• D) the company's main objective is to maximize growth.
• E) the company's free cash flow is high enough to have funds available for investment.

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Definitions:

Saturated Molecule

A molecule that contains only single bonds between carbon atoms and no double or triple bonds.

Double Bonds

Chemical bonds where two pairs of electrons are shared between two atoms, making the bond stronger and the molecules more rigid.

Lipid

A group of naturally occurring molecules that include fats, waxes, sterols, fat-soluble vitamins, and other components essential for cell structure and function.

Fingerprints

Unique patterns formed by ridges on the tips of fingers, used for personal identification.