One of the Suggested Advantages of an Unrelated Diversification Strategy

question 92

Multiple Choice

One of the suggested advantages of an unrelated diversification strategy is that it

• A)expands a firm's competitive advantage opportunities to include a wider array of businesses.
• B)spreads the stockholders' risks across a group of truly diverse businesses.
• C)increases strategic fit opportunities and the potential for a 1 + 1 = 3 outcome on the bottom line.
• D)results in having more cash cow businesses than cash hog businesses.
• E)facilitates capturing the financial fits among sister businesses (as compared to a strategy of related diversification).

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Definitions:

M&M Candy

A brand of small, multi-colored chocolate candies covered in a hard shell.

Probability

The likelihood that an event will happen, expressed numerically between 0 and 1.

Production Run

A manufacturing process or period during which a batch of goods is produced, often of the same product, without interruption.

Sampled

The process of selecting a subset of individuals or items from a larger population for the purpose of making inferences about the population.