One Strategic Fit-Based Approach to Related Diversification Would Be to

question 67

Multiple Choice

One strategic fit-based approach to related diversification would be to

• A)diversify into new industries that present opportunities to transfer specialized expertise, technological know-how, or other valuable resources and capabilities from one business's value chain to another's.
• B)diversify into foreign markets where the firm has unrelated businesses.
• C)acquire rival firms that have broader product lines so as to give the company access to a wider range of buyer groups.
• D)acquire companies in forward distribution channels (wholesalers and/or retailers).
• E)expand into foreign markets where the firm currently does no business.

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Definitions:

Inventory

The raw materials, work-in-process products, and finished goods that a company holds for the purpose of sale in the near future.

Marketable Securities

Financial instruments that can be easily converted into cash, such as stocks, bonds, or treasury bills.

Operating Activities

Activities that relate directly to the primary business operations of a company, such as selling products or providing services.

Financing Activities

Transactions that involve raising capital for the business and repaying investors, such as issuing debt and equity or paying dividends.