79.
Briefly discuss when it makes good strategic sense for a company to consider diversification.
80.
Identify and briefly discuss each of the three tests for determining whether diversification into
a new business is likely to build shareholder value.
81.
The attractiveness test is the most important test for determining whether diversification into
a new business is likely to result in 1 + 1 = 3 increases in shareholder value (as opposed to
simply a 1 + 1 = 2 type of increase). True or false? Justify and explain your answer.
82.
Identify and briefly discuss each of the three options for entering new businesses. Which one
is the most popular in the sense of being used most frequently? For what reasons?
83.
Carefully explain the difference between a strategy of related diversification and a strategy of
unrelated diversification.
84.
What is meant by the term
strategic fit
? What are the advantages of pursuing strategic fit in
choosing which industries to diversify into?
85.
Identify and explain the meaning and strategic significance of each of the following terms:
a. related diversification
b. strategic fit
c. economies of scope
d. retrenching
e. unrelated diversification
86.
Discuss the pros and cons of a strategy of unrelated diversification.
87.
Identify and briefly describe the six steps involved in evaluating a diversified company’s
business lineup and diversification strategy.
88.
What does the industry attractiveness test involve in evaluating a diversified company’s
business lineup? Why is it relevant?
89.
Briefly explain the relevance of quantitatively measuring the competitive strength of each
business in a diversified company’s business portfolio and determining which business units
are strongest and weakest.
90.
Briefly explain the Nine-Cell Industry Attractiveness-Competitive Strength Matrix and
interpret how a weak performing business unit would be depicted in the matrix.
91.
What is meant by the term
resource fit
as it applies to evaluating a diversified company’s
business lineup?
92.
Explain the difference between a cash cow business and a cash hog business.
93.
What factors should management consider when ranking business units and setting a priority
for resource allocation?
94.
What are the four main strategic alternatives a diversified company can employ to improve the
performance of its overall business lineup?
95.
Under what circumstances might an already diversified company chose to enter additional
businesses and broaden its diversification base?
96.
Under what circumstances might a diversified firm choose to divest one or more of its
businesses?
97.
Under what circumstances might an already diversified company choose to pursue corporate
restructuring:
