Diversification Ought to Be Considered When a

question 52

Multiple Choice

Diversification ought to be considered when a

• A)company's profits are being squeezed,and it needs to increase its net profit margins and return on investment.
• B)company lacks sustainable competitive advantage in its present business.
• C)company begins to encounter diminishing growth prospects in its mainstay business.
• D)company has run out of ways to achieve a distinctive competence in its present business.
• E)company is under the gun to create a more attractive and cost-efficient value chain.

---

Definitions:

Public Choice Theory

The economic analysis of government decision making, politics, and elections.

Government Failure

A situation where government intervention in the economy creates inefficiencies and leads to a misallocation of resources.

Unfunded Liability

Obligations or debts for which sufficient funds have not been set aside, particularly relevant in the context of pensions and benefits.

Medicare

A federal health insurance program in the United States for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.