Which of the Following Statements Is True About How the Portfolio

question 77

Multiple Choice

Which of the following statements is true about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio?

• A) The fewer businesses in which a corporation competes, the smaller its overall chances of failing.
• B) Risk can be reduced through related diversification (creating or acquiring companies in related businesses).
• C) Invest the profits and cash from mature, slow-growth businesses into newer, faster growing businesses.
• D) The most significant advantage of the portfolio strategy is the ability to categorize businesses as stars, exclamation points, question marks, and dogs.
• E) All of these statements about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio are true.

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Definitions:

Moving Assembly Line

An innovation in manufacturing where products are assembled as they move along a conveyor belt, significantly improving efficiency.

Transformation Process

The conversion of inputs into outputs, thus transforming raw materials, labor, and information into products or services.

Productivity Variables

Productivity variables are factors that influence the efficiency and effectiveness with which resources are converted into outputs, including technology, labor skills, and management practices.

Operations Managers

Specialists tasked with supervising, devising, and regulating the processes involved in manufacturing and altering business tasks in the production of goods or services.