In Which of the Following Instances Is Retrenching to a Narrower

question 29

Multiple Choice

In which of the following instances is retrenching to a narrower diversification base not likely to be an attractive or advisable strategy for a diversified company?

• A) when a diversified company has businesses that are weakly positioned in their respective industries and are struggling to earn a decent return on investment
• B) when a diversified company has too many cash cows
• C) when one or more businesses are cash hogs with questionable long-term potential
• D) when businesses in once-attractive industries have badly deteriorated
• E) when a diversified company has businesses that have little or no strategic or resource fits with the "core" businesses that management wishes to concentrate on

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Definitions:

Simple Delivery Contract

Type of contract in which purchased goods are transferred to the buyer from the seller either at the time of the sale or at some time later by the seller’s delivery.

Merchant

An individual or business that sells goods or services in a commercial setting.

Destroyed Through Fire

Destroyed through fire describes the complete loss or devastation of property, goods, or structures as a result of a fire outbreak, often leading to insurance claims and legal considerations.

Common-Carrier Delivery Contract

A type of contract in which purchased goods are delivered to the buyer via an independent contractor, such as a trucking line.