Diversifying into a New Industry by Forming a New Internal

question 50

Multiple Choice

Diversifying into a new industry by forming a new internal subsidiary to enter and compete in the target industry is attractive when

• A)all of the potential acquisition candidates are losing money.
• B)it is impractical to outsource most of the value chain activities that have to be performed in the target business/industry.
• C)there is ample time to launch the new business from the ground up.
• D)the company has built up a hoard of cash with which to finance a diversification effort.
• E)none of the companies already in the industry is an attractive strategic alliance partner.

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Definitions:

Brain Size

The physical measurement of the brain's volume, often discussed in relation to cognitive abilities or evolutionary biology.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, comes to elicit a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without requiring any learning.

Conditioned Taste Aversion

An acquired response where an individual avoids consuming a certain food or drink due to a previous negative experience, such as illness.