A strategy of diversifying into unrelated businesses A. 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. B. A) is aimed at achieving good financial fit (whereas related diversification aims at good strategic fit). C. E) generally offers more competitive advantage potential than related diversification. D. B) is the best way for a company to pass the attractiveness test in choosing which types of businesses/industries to enter. E. C) discounts the importance of strategic fit and instead focuses on building and managing a group of businesses in attractive industries that can be acquired on financial terms that allow for acceptable returns on investment.

Question

Business

Caleb Long

14 April, 03:35

A strategy of diversifying into unrelated businesses A. 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. B. A) is aimed at achieving good financial fit (whereas related diversification aims at good strategic fit). C. E) generally offers more competitive advantage potential than related diversification. D. B) is the best way for a company to pass the attractiveness test in choosing which types of businesses/industries to enter. E. C) discounts the importance of strategic fit and instead focuses on building and managing a group of businesses in attractive industries that can be acquired on financial terms that allow for acceptable returns on investment.

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Khalil Turner · Answer 1

The correct answer is letter "E": discounts the importance of strategic fit and instead focuses on building and managing a group of businesses in attractive industries that can be acquired on financial terms that allow for acceptable returns on investment.

Explanation:

By diversifying, companies engage in businesses where they are not specialized in an attempt of increasing their market scope. The main objective of this approach is to implement profitable production processes in different industries regardless of the strategies necessary to achieve that goal. By increasing their market scope, thus their market share, firms look for generating more revenue.