The Businesses in a Diversified Company's Lineup Exhibit Good Resource

question 82

Multiple Choice

The businesses in a diversified company's lineup exhibit good resource fit when

• A)the resource requirements of each business exactly match the resources the company has available.
• B)individual businesses have matching resource requirements at points along their value chain and add to a company's overall resource strengths and when solid parenting capabilities exist without spreading itself too thin.
• C)each business generates just enough cash flow annually to fund its own capital requirements and thus does not require cash infusions from the corporate parent.
• D)each business unit produces sufficient cash flows over and above what is needed to build and maintain the business, thereby providing the parent company with enough cash to pay shareholders a generous and steadily increasing dividend.
• E)there are enough cash cow businesses to support the capital requirements of the cash hog businesses.

---

Definitions:

Trade Promotions

Special marketing tactics aimed at increasing sales and market presence, often implemented through discounts or bulk offers.

Cycle Inventory

Cycle inventory refers to the portion of inventory that companies hold to fulfill regular sales orders, rotating regularly with demand.

Managerial Levers

are tools or mechanisms that managers can pull to influence the performance, direction, or strategy of a business, such as policy adjustments, operational changes, or incentive schemes.

Fixed Cost

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance, providing a base level of costs in an operation.