A Strategy of Diversifying into Unrelated Businesses

question 41

Multiple Choice

A strategy of diversifying into unrelated businesses:

• A) is aimed at achieving good financial fit,whereas related diversification aims at good strategic fit.
• B) is the best way for a company to pass the attractiveness test in choosing which types of businesses/industries to enter.
• C) discounts the importance of strategic fit benefits and instead focuses on building and managing a group of businesses capable of delivering good financial performance irrespective of the industries these businesses are in.
• D) concentrates on diversifying into businesses where a company can leverage use of a well-known brand name in ways that create added value for shareholders.
• E) generally offers more competitive advantage potential than related diversification.

Recognize the different managerial strategies and their assumptions about employee management.

Appreciate the role of organizational culture in business strategies.

Identify key cultural values and their impact on organizational strategies.

Understand the organizational variables that complement specific managerial strategies.

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Definitions:

Sherman Act

A foundational antitrust law in the United States aimed at prohibiting monopolistic and anti-competitive practices.

Unreasonable Conduct

Behavior by an individual or entity that is not rational or sensible, often violating norms or laws.

Antitrust Actions

Legal measures taken to prevent or reduce monopoly power and foster competition in the marketplace.

Antitrust Action

Measures enforced by governments to prevent or reduce market monopolies and promote competition among businesses.