The Industry Attractiveness Test for Evaluating Whether Diversification into a Particular

question 90

Multiple Choice

The industry attractiveness test for evaluating whether diversification into a particular industry is likely to build shareholder value involves determining whether:

• A) conditions in the target industry are sufficiently attractive to permit earning consistently good or better profits and returns on investment than that of the company's present business(es).
• B) the potential diversification move will boost the company's competitive advantage in its existing business.
• C) shareholders will view the contemplated diversification move as attractive.
• D) key success factors in the target industry are attractive.
• E) there are attractive strategic fits between the value chains of the company's present businesses and the value chain of the new business it is considering entering.

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Definitions:

Early Childhood

A developmental stage that encompasses the period from birth to 8 years of age, characterized by rapid growth and learning.

Learned Helplessness

A condition in which individuals believe they have no control over the outcomes of events, resulting from repeated exposure to uncontrollable situations.

Feeling

An emotional state or reaction that consciously emerges from experiences, perceptions, or interactions.

Control

in psychology, relates to an individual's ability to influence or direct their environment and outcomes affecting their life.