Retrenching to a Narrower Diversification Base Can Be Attractive or Advisable

question 22

Multiple Choice

Retrenching to a narrower diversification base can be attractive or advisable EXCEPT when:

• A) certain businesses have questionable long-term potential.
• B) a diversified company has businesses that have little or no strategic or resource fits with the "core" businesses that management wishes to concentrate on.
• C) certain business units are weakly positioned and show poor prospects for providing a good return on investment.
• D) market conditions in a once-attractive business have badly deteriorated.
• E) business units are cash cows with promising futures.

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Definitions:

Common Denominator

The shared multiple of the denominators of two or more fractions, allowing them to be compared or combined.

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The result of adding two or more numbers or quantities together.

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