Diversification Becomes a Relevant Strategic Option When a Company Does

question 54

Multiple Choice

Diversification becomes a relevant strategic option when a company does all of the following EXCEPT for when it:

• A) spots opportunities to expand into industries whose technologies and products complement its present business.
• B) leverages existing resources and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.
• C) has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses.
• D) can open up new avenues for reducing costs by diversifying into closely related businesses.
• E) expands into additional businesses that unlock possibilities for a comprehensive cost enhancement strategy.

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Definitions:

Disappointment

Disappointment is the feeling of sadness or dissatisfaction that arises from unmet expectations or outcomes.

Past Debts

Financial obligations or amounts of money owed from previous borrowing, which have not yet been paid back.

Property Taxes

Taxes levied by local governments based on the estimated value of property and land owned, typically used to fund public services and infrastructure.

Unforeseen Expenses

Costs that were not planned or predicted, often arising suddenly and requiring immediate financial attention.