To Test Whether a Particular Diversification Move Has Good Prospects

question 37

Multiple Choice

To test whether a particular diversification move has good prospects for creating added shareholder value,corporate strategists should use:

• A) the profit test,the competitive strength test,the industry attractiveness test,and the capital gains test.
• B) the better-off test,the competitive advantage test,the profit expectations test,and the shareholder value test.
• C) the barrier-to-entry test,the competitive advantage test,the growth test,and the stock price effect test.
• D) the strategic fit test,the industry attractiveness test,the growth test,the dividend effect test,and the capital gains test.
• E) the attractiveness test,the cost-of-entry test,and the better-off test.

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Definitions:

Disruptive Innovations

Innovations that significantly alter or disrupt the functioning of markets and industries, often displacing established market-leading firms and products.

Brick-And-Mortar Stores

Physical retail outlets located in buildings as opposed to online or virtual stores, offering face-to-face customer experiences.

Decision Support System

A computer-based system that assists in making decisions by providing relevant data and analysis tools.

Raw Facts

Basic, unprocessed information or data without any analysis or interpretation.