In Which of the Following Instances Is Retrenching to a Narrower

question 48

Multiple Choice

In which of the following instances is retrenching to a narrower diversification base not likely to be an attractive or advisable strategy for a diversified company?

• A)When a diversified company has businesses that are weakly positioned in their respective industries and are struggling to earn a decent return on investment
• B)When a diversified company has too many cash cows
• C)When one or more businesses are cash hogs with questionable long-term potential
• D)When businesses in once-attractive industries have badly deteriorated
• E)When a diversified company has businesses that have little or no strategic or resource fits with the core businesses that management wishes to concentrate on

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