The Two Biggest Drawbacks or Disadvantages of Unrelated Diversification Are

question 102

Multiple Choice

The two biggest drawbacks or disadvantages of unrelated diversification are

• A) the difficulties of passing the cost-of-entry test and the ease with which top managers can make the mistake of diversifying into businesses where competition is too intense.
• B) the difficulties of capturing financial fit and having insufficient financial resources to spread business risk across many different lines of business.
• C) demanding managerial requirements and limited competitive advantage potential that cross-business strategic fit provides.
• D) Ending up with too many cash hog businesses and too much diversity among the competitive strategies of the businesses it has diversified into.
• E) the difficulties of achieving economies of scope and conflicts/incompatibility among the competitive strategies of the company's different businesses.

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Definitions:

Chunking

A memory strategy that involves dividing information into smaller, manageable units or chunks to improve retention and recall.

Semantic Memory

A category of persistent memory tasked with the ability to remember words, notions, or numerals, vital for both language interpretation and application.

Explicit Memory

The conscious recall of facts and events, which can be intentionally retrieved and articulated.

General Knowledge

Broadly refers to information that is widely known by many people across various domains such as history, science, culture, and facts about the world.