Which of the Following Statements About Cross-Business Strategic Fit in a Diversified

question 16

Multiple Choice

Which of the following statements about cross-business strategic fit in a diversified enterprise is NOT accurate?

• A) Strategic fit between two businesses exists when the management know-how accumulated in one business is transferable to the other.
• B) Strategic fit exists when two businesses present opportunities to economize on marketing, selling, and distribution costs.
• C) Competitively valuable cross-business strategic fits are what enable related diversification to produce a synergistic performance outcome.
• D) Strategic fit is primarily a by-product of unrelated diversification and exists when the value chain activities of unrelated businesses possess economies of scope and good financial fit.
• E) Strategic fit exists when a company can transfer its brand-name reputation to the products of a newly acquired business and add to the competitive power of the new business.

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Definitions:

Market-Creating Innovation

Innovations that introduce new products or services, creating new demand and potentially new markets.

Lower-Income Segment

A portion of the population or market characterized by lower earnings, often targeted by businesses offering more affordable products or services.

Developing Economies

Countries that are in the process of industrialization, with relatively low per capita income and seeking to improve their economic base.

Market-Creating Innovations

Innovations that establish new markets by solving unserved or underserved problems and fulfilling unmet needs.