Which One of the Following Is Not a Factor That

question 9

Multiple Choice

Which one of the following is not a factor that makes it appealing to diversify into a new industry by forming an internal start-up subsidiary to enter and compete in the target industry?

• A) when internal entry is cheaper than entry via acquisition
• B) when a company possesses the skills and resources needed to compete effectively and there is ample time to launch the business
• C) when adding new production capacity will not adversely impact the supply/demand balance in the industry
• D) when the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms
• E) when incumbent firms are likely to be slow or ineffective in combating a new entrant's efforts to crack the market

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Definitions:

Competitive Advantage

A business strategy that allows a company to outperform its competitors, often through greater market share, lower costs, or superior quality.

Vendors

Individuals or companies that sell goods or services to another entity, usually as part of the supply chain in a specific commercial transaction.

Service Sector

The segment of the economy that provides services rather than producing goods, including sectors like healthcare, education, and finance.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit.