A Strategy of Diversifying into Unrelated Businesses

question 41

Multiple Choice

A strategy of diversifying into unrelated businesses:

• A) is aimed at achieving good financial fit,whereas related diversification aims at good strategic fit.
• B) is the best way for a company to pass the attractiveness test in choosing which types of businesses/industries to enter.
• C) discounts the importance of strategic fit benefits and instead focuses on building and managing a group of businesses capable of delivering good financial performance irrespective of the industries these businesses are in.
• D) concentrates on diversifying into businesses where a company can leverage use of a well-known brand name in ways that create added value for shareholders.
• E) generally offers more competitive advantage potential than related diversification.

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