A company should pursue unrelated diversification instead of related diversification when: a. the bureaucratic costs of implementation do not exceed the value that can be created by realizing economies of scope. b. it wants to maximize growth. c. its core skills are highly specialized and have few applications outside its core business. d. the company's top managers are skilled at acquiring and turning around poorly run enterprises. e. its core technological skills are applicable to a wide variety of industrial and commercial situations.

Question

Goon

Business

31 July, 02:41

A company should pursue unrelated diversification instead of related diversification when: a. the bureaucratic costs of implementation do not exceed the value that can be created by realizing economies of scope. b. it wants to maximize growth. c. its core skills are highly specialized and have few applications outside its core business. d. the company's top managers are skilled at acquiring and turning around poorly run enterprises. e. its core technological skills are applicable to a wide variety of industrial and commercial situations.

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Lindsay Rice · Answer 1

Answer: Option C

Explanation:

Unrelated diversification can be defined as the form of diversification when the business adds some of the new products not related to the core strength or core products of the company.

It tries to penetrate into some other business. Example: A shoe making company starts making sports wear.

The companies whose core strength is skilled and specialized and has only few applications outside the core skills. These company can pursue unrelated diversification instead of related.