Diversification Becomes a Relevant Strategic Option for a Company EXCEPT

question 72

Multiple Choice

Diversification becomes a relevant strategic option for a company EXCEPT when it

• A) spots opportunities to expand into industries whose technologies and products complement its present business.
• B) leverages existing resources and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.
• C) has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses.
• D) can open up new avenues for reducing costs by diversifying into closely related businesses.
• E) expands into additional businesses that unlock possibilities for a comprehensive cost enhancement strategy.

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Definitions:

Spot Market

A public financial market in which financial instruments or commodities are traded for immediate delivery.

Communications Technology

The branch of technology that deals with the transmission of information through digital or analog means.

Working Capital Management

Working capital management involves managing the short-term assets and liabilities of a company to ensure it has sufficient liquidity to run its operations smoothly.

Multinational Firms

Companies that operate in multiple countries, managing production or service facilities outside their home country.