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.

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Definitions:

Cooperation

The action of working together towards common goals or interests, often resulting in mutual benefits.

Material Culture

The physical objects, resources, and spaces that people use to define their culture, including artifacts, buildings, and landscapes.

Non-material Culture

The intangible elements of culture, such as beliefs, practices, norms, and values that influence the way members of a society live and interact.

Mores

Deeply held cultural norms and values that embody the moral views of a group or society.