Which of the Following Is NOT a Factor That Makes

question 104

Multiple Choice

Which of the following is NOT a factor that makes it appealing to diversify into a new industry by forming an internal startup subsidiary to enter and compete in the target industry?

• A) When internal entry is cheaper than entry via acquisition
• B) When a company possesses the skills and resources to overcome entry barriers and there is ample time to launch the business and compete effectively
• C) When adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions
• D) When the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms
• E) When incumbent firms are likely to be slow or ineffective in combating a new entrant's efforts to crack the market

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Definitions:

Economies Of Scale

The cost advantage achieved by an increase in production, leading to a lower cost per unit.

Facilities

Physical locations or infrastructures where business operations occur, including offices, factories, and warehouses.

Distributors

Entities engaged in the business of distributing goods, typically bought from manufacturers, directly to retailers or customers.

Supply Chain

The entire process of making and selling commercial goods, including raw materials sourcing, manufacturing, distribution, and sales.