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:

Roger Williams

A Puritan minister, theologian, and founder of the colony of Rhode Island, he is known for his advocacy for religious freedom and separation of church and state in the early 17th century.

Anne Hutchinson

A Puritan spiritual adviser, mother of 15, and an important participant in the Antinomian Controversy that shook the infant Massachusetts Bay Colony from 1636 to 1638.

Puritans

A religious group from England who sought to purify the Church of England and who established colonies in New England in the early 17th century.

Overseas Empire

A group of territories or nations under the rule of a single sovereign state or monarch, usually spread across continents.