Diversification Becomes a Relevant Strategic Option in All but Which

question 137

Multiple Choice

Diversification becomes a relevant strategic option in all but which one of the following situations?

• A) When a company spots opportunities to expand into industries whose technologies and products complement its present business.
• B) When a company is only earning a low profit margin in its principal business.
• C) When a company 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) When a company can open up new avenues for reducing costs by diversifying into closely related businesses.
• E) When a company can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.

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