Michael Porter's "Attractiveness Test" Means That a Firm Considering Diversifying

question 36

Multiple Choice

Michael Porter's "attractiveness test" means that a firm considering diversifying into another industry should

• A)see that the barriers to entry to that industry are low.
• B)be able to see a way to make superior profits in that industry.
• C)also consider how unattractive their existing industry is, by comparison.
• D)see that some firms in that industry have left, leaving space for newcomers.

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Definitions:

Supplier-producer Cooperation

A collaborative relationship between suppliers and manufacturers aimed at optimizing the efficiency of production and the quality of the products through mutual effort and alignment of processes.

Marketing Mix

The set of tools that a company uses to influence demand for its product, typically categorized into four Ps: Product, Price, Place, and Promotion.

Consumer Behavior Process

The series of actions and decision-making steps that consumers go through before, during, and after purchasing a product or service.

Purchase Decision

The conclusion or resolution reached by a consumer after evaluating alternatives in the buying process.