How Can the Portfolio Strategy Be Used to Help Managers

question 57

Multiple Choice

How can the portfolio strategy be used to help managers acquire companies that fit well with the rest of their corporate portfolio?

• A)The fewer businesses in which a corporation competes,the smaller its overall chances of failing. 
• B)Risk can be reduced through related diversification-creating or acquiring companies with related core capabilities. 
• C)Invest the profits and cash from mature,slow-growth businesses into newer,faster growing businesses. 
• D)The most significant advantage of the portfolio strategy is the ability to categorize businesses as stars,exclamation points,question marks,and dogs.

---

Definitions:

Form Utility

The value added to goods through a change in form, shape, or appearance, to make them more useful or appealing.

Raw Materials

Basic substances in their natural, modified, or semi-processed states, used as inputs to a production process for manufacturing finished goods.

Quality Control

A process through which a business seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated.

Visual Inspection

The process of examining objects, components, or materials for defects using human sight, sometimes assisted by optical instruments.