What Makes Related Diversification an Attractive Strategy

question 2

Multiple Choice

What makes related diversification an attractive strategy?

• A) The ability to broaden the company's product line.
• B) The opportunity to convert cross-business strategic fits into competitive advantages over business rivals whose operations don't offer comparable strategic fit benefits.
• C) The potential for improving the stability of the company's financial performance.
• D) The ability to serve a broader spectrum of buyer needs.
• E) The added capability it provides in overcoming the barriers to entering foreign markets.

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Definitions:

Probability

An indication of how probable an event is to happen, represented numerically between 0 and 1, with 0 meaning it cannot happen and 1 meaning it is certain to happen.

Risk Loving

A financial term describing an individual or entity's preference for taking risks, where the potential for higher gains outweighs the possibility of losses.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Expected Utility Maximizer

An economic theory that assumes individuals choose among risky alternatives in such a way as to maximize their expected utility.