It Becomes Particularly Urgent for a Company to Consider Diversification

question 119

Multiple Choice

It becomes particularly urgent for a company to consider diversification when there are

• A)opportunities to leverage existing competencies and capabilities by expanding into businesses where these same resources are key success factors and valuable competitive assets.
• B)diminishing market opportunities and stagnating sales in its principal business.
• C)opportunities to lower costs by entering closely related businesses.
• D)opportunities to transfer a powerful and well-respected brand name to the products of other businesses and thereby increase the sales and profits of these newly entered businesses.
• E)needs to avoid putting all of its "eggs" in one industry basket.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded; also known as the market-clearing price.

Cotton T-shirts

Garments made from cotton fabric, typically characterized by short sleeves and a round neckline.

Tobacco

A product prepared from the leaves of the tobacco plant by curing them, commonly used for smoking, chewing, or snuff.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes.