The Attractiveness Test for Evaluating Whether Diversification into a Particular

question 38

Multiple Choice

The attractiveness test for evaluating whether diversification into a particular industry is likely to build shareholder value involves determining whether

• A) conditions in the target industry are sufficiently attractive to permit earning consistently good profits and returns on investment.
• B) the potential diversification move will boost the company's competitive advantage in its existing business.
• C) shareholders will view the contemplated diversification move as attractive.
• D) key success factors in the target industry are attractive.
• E) there are attractive strategic fits between the value chains of the company's present businesses and the value chain of the new business it is considering entering.

---

Definitions:

Table

A collection of data arranged in rows and columns, commonly used in databases and data manipulation.

Rows

In the context of two-dimensional data structures or databases, horizontal groups of data fields or elements that together represent a single record or entry.

Columns

Vertical divisions in a table or spreadsheet, categorizing information by field.

Two-dimensional Array

A matrix-like structure that allows for storage and organization of data in rows and columns, facilitating operations on multi-dimensional data.