A Strategy of Diversifying into Unrelated Businesses

question 37

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 and instead focuses on building and managing a group of businesses in attractive industries that can acquired on financial terms that allow for acceptable returns on investment.
• 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.