A Company Can Best Accomplish Diversification into New Industries by

question 36

Multiple Choice

A company can best accomplish diversification into new industries by

• A)outsourcing most of the value chain activities that have to be performed in the target business/industry.
• B)acquiring a company already operating in the target industry, creating a new business from scratch, or forming a joint venture with one or more companies to enter the target industry.
• C)integrating forward or backward into the target industry.
• D)shifting from a strategic group comprised mostly of single-business companies to a strategic group comprised of diversified companies.
• E)employing an offensive strategy with new product innovation as its centerpiece.

---

Definitions:

Financial Statements

Reports that summarize the financial performance and position of a company.

Working Papers

Documents prepared or obtained by auditors as part of their audit process, containing the evidence and conclusions on which their opinion is based.

Accounting Adjustments

Entries made in the books of accounts to accurately reflect the revenues and expenses for a given period, including accruals, deferrals, and estimates.

Account Balances

The amounts of money in an account, representing assets or liabilities at a particular point in time.