Retrenching to a Narrower Diversification Base

question 17

Multiple Choice

Retrenching to a narrower diversification base

• A) is usually the most attractive long-run strategy for a broadly diversified company confronted with recession, high interest rates, mounting competitive pressures in several of its businesses, and sluggish growth.
• B) has the advantage of focusing a diversified firm's energies on building strong positions in a few core businesses rather the stretching its resources and managerial attention too thinly across many businesses.
• C) is an attractive strategy option for revamping a diverse business lineup that lacks strong cross-business financial fit.
• D) is sometimes an attractive option for deepening a diversified company's technological expertise and supporting a faster rate of product innovation.
• E) is a strategy best reserved for companies in poor financial shape.

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