One Strategic Fit-Based Approach to Related Diversification Would Be to

question 67

Multiple Choice

One strategic fit-based approach to related diversification would be to

• A)diversify into new industries that present opportunities to transfer specialized expertise, technological know-how, or other valuable resources and capabilities from one business's value chain to another's.
• B)diversify into foreign markets where the firm has unrelated businesses.
• C)acquire rival firms that have broader product lines so as to give the company access to a wider range of buyer groups.
• D)acquire companies in forward distribution channels (wholesalers and/or retailers).
• E)expand into foreign markets where the firm currently does no business.

---

Definitions:

Average Revenue

The average amount of money received per unit of product or service sold, calculated by dividing total revenue by the number of units sold.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a product or service.

Marginal Cost

The extra financial burden of manufacturing an additional unit of a product or service.

Price Takers

Firms or individuals who accept the market price as given and have no power to influence that price due to the competitive nature of the market.