A Strategy Based on Diversification May Fail to Add Value

question 70

Multiple Choice

A strategy based on diversification may fail to add value because companies

• A) seek to achieve differentiation instead of low cost.
• B) diversify into areas in which they have some knowledge and miss out on profitable opportunities in other areas.
• C) make acquisitions rather than develop new technologies on their own.
• D) incur bureaucratic costs that exceed the value created by the strategy.
• E) seek to achieve cost leadership instead of differentiation.