Which Of The Following Is The Best Example Of Unrelated Diversification Chegg



Northwest Airlines provides air travel for the public, whereas Procter & Gamble manufactures consumer goods. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. Font size Which of the following is the best example of unrelated diversification? Which one of the following is NOT something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and beyond what the businesses could generate operating. 18) Which of the following is the best example of related diversification? -A manufacturer of dining room furniture acquiring a maker of patio furniture. ) the attractiveness test (as it relates to a potential diversification move) b. As controls, the equation includes one. A business owner needs to consider efficient diversification strategies to build a competitive advantage, to achieve economies of scale or scope, and/or to take advantage of a financial opportunity that aligns with the business' strategic plan. With a related diversification strategy you have the advantage of understanding the business and of knowing what the industry opportunities and threats are; yet a number of related. Multi-Chapter Exams - Exam 2 Question 11 Previous Which of the following is the best example of unrelated diversification? O A manufacturer of cheeses acquiring a retail chain specializing in sports apparel A pizza chain acquiring a chain of hamburger outlets A TV broadcasting company buying a Hollywood movie studio o A producer of canned soups acquiring a maker of breakfast cereals O A chain. is ordinarily described as diversification and it can be materialized through internal R&D, licensing, merger and acquisitions, joint ventures or alliances. Started only as an online shop for selling physical books in 1997, today Amazon sells anything that can be sold online in the global scale. With no expected loss from fraud on the market, shareholders do not need. In broad terms, diversified. Launching Prepaid cards. e) An online merchandiser acquiring a retail supermarket that specializes in natural and organic foods. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. The animated movie Chicken Run is a feature-length example of related diversification. Conglomerates (companies following unrelated diversification strategies) dominate the private sector economy in several countries such as Latin America, South Korea and India while US has more highly diversified companies. For example, a dairy company producing cheese adds a new variety of cheese to its product line. Pepsi co diversification strategy case analysis 1. Don't just say, "I'm the best candidate. Perhaps the most high profile case is the short rise and rapid fall of Virgin Cola in the mid-1990s – following an ambitious, yet unsuccessful plan to compete with Coca-Cola and Pepsi. Which of the following is not one of the appeals or benefits of related diversification? a-It can offer opportunities for transferring competitively valuable expertise, technological know-how, or other valuable resources from one business to another. Let's further assume that you could invest all $1 million in your employer's stock, or you could invest 50% in your. diversification, and the squared term for produc t diversification, ca pture the hypothesized nonlinear relationships as specified in H1a, H1b, and H2. An example of unrelated diversification in a business could be a toy manufacturer that is also manufacturing industrial wiring for the construction industry. consumer spending on entertainment decreased nationally. Corporate diversification within the airline business has a long history. all of the above. As has been mentioned earlier in our discussion of diversification, some companies that have pursued unrelated high. Explanation: B) If the businesses are not similar, the strategy is called unrelated diversification. true or false? false one of the risks of vertical integration is that they may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain. Facebook; Twitter; LinkedIn; HERSHEY, Pa. on StudyBlue. Position-level: Suppose you invested your entire life savings into Domino's Pizza stock. Unrelated Diversification (aka Conglomerate Diversification): This fourth major category of corporate strategy alternatives for growth involves diversifying into a line of business unrelated to the current ones. The previous product of the company was telephone line but it spends $120 billion for the acquisition of cable television. In a diversification strategy, the firm enters a new market with a new product. Here are a few examples of different kinds of diversification and how they can reduce risk. 1 which of the following would not be something to look for in identifying a diversified company's strategy?. With a related diversification strategy you have the advantage of understanding the business and of knowing what the industry opportunities and threats are; yet a number of related. For those in the market to purchase U. 5 / 5 ( 5 votes ) Walt Disney case study - Read the attached case study and answer the following questions. As per Chegg Q&A Guidelines you must answer first four sub-parts in case of a multiple sub-part question or only the first question in case of Multiple unrelated/different questions are posted by students. Or a medium one. With no expected loss from fraud on the market, shareholders do not need. ) the attractiveness test (as it relates to a potential diversification move) b. The new brand joins other better-for-you choices under the Hershey umbrella such as Brookside. Create value for shareholders c. A producer of canned soups acquiring a maker of breakfast cereals In companies pursuing a strategy of unrelated diversification, A. The following web designs represent the most viewed pages by users over a 30 day period, Chegg: HubSpot: doesn't mean you should do as they do. the left-hand molecule contains two bromine atoms. Luckily for Coca-Cola, its investment paid off—Columbia was sold to Sony for $3. When a company purchases another business that does something different from what the purchasing company does, the purchasing company is using a strategy of A. As the industry grew and matured, Pan American World Airways came to epitomise the concept of. investment cycle). whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. There are three basic types of diversification strategies that may composed of several plans that range from the designed and development of new products to the licensing of these new technologies. , where stocks move around on their own more (are less correlated to the overall market) than elsewhere, the number is about 20 to 30 stocks. Or a large. investment cycle). In a diversification strategy, the firm enters a new market with a new product. , - Data were gathered from a number of successful diversifiers, such as GE, to determine the practices they follow and how these might be applied by other organizations. Diversification can be segmented into related diversification or unrelated diversification. Let's take a portfolio with two assets. The ability to spread business risk over truly diverse businesses (as compared to related diversification which is limited to spreading risk only among businesses with strategic fit). For example, in writing about diversification through internal development, Jon Didrichsen draws a useful distinction between a company with an "extensive central technology" and one with a. Porter maintains that achieving competitive advantage requires a firm to make a choice about the type and scope of its competitive advantage. The new will have no relationship to the company's technology, products or markets. Businesses are said to be "related" when they possess competitively valuable cross-business value-chain matchups. Morgan Stanley's building of a casino in Atlantic City is a good example of related diversification. 16: When Coca-Cola spends huge amounts on advertising in an attempt to create a positive image for its Classic Coke, this is an example of: A) a stuck-in-the-middle. A producer of canned soups acquiring a maker of breakfast cereals In companies pursuing a strategy of unrelated diversification, A. Pinnacle Inc. horizontal diversification. For example, when a notebook manufacturer starts to manufacture pencils and when they enter pencil manufacturing, then this is a horizontal diversification strategy. Alphabet b. 9-43 Combination Related-Unrelated Diversification Strategies Dominant-business firms One major core business accounting for 50 - 80 percent of revenues, with several small related or unrelated businesses accounting for remainder Narrowly diversified firms Diversification includes a few (2 - 5) related or unrelated businesses Broadly. For example, any shareholder that holds the S&P 500 index would have shares in both Coca Cola and Pepsico. But many successful companies, such as Tyco and GE, continue to buy unrelated businesses. The following graph shows how the efficient. Which of the following is not a characteristic of strategic alliances entered into to support related diversification? a. The basic premise of unrelated diversification is: That any business that has good profit prospects and can be acquired on good financial terms is a good business to diversify into. A newsprint manufacturer acquiring a chain of newspapers. Following Benjamin Graham and David Dodd, the authors of the 1934 book, "Security Analysis," they want to understand each business in which they might invest. It has various unrelated business divisions including FMCG, Hotels, Paper & Packaging, Agribusiness etc. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Related, Unrelated, and Multinational Diversification As Forms of Business Strategy Unrelated, and Multinational Diversification As. For example, Warren Buffett ( Trades , Portfolio ) and those he called "The Superinvestors of Graham-and-Doddsville" have little interest in mathematical formulas. Northwest Airlines provides air travel for the public, whereas Procter & Gamble manufactures consumer goods. An electrical equipment manufacturer acquiring a potato chip company. 17% and stock B has an average expected return of 6,24%, the portfolio standard deviation is 3,75% (check out the Portfolio Standard Deviation article on how to calculate the standard deviation of a portfolio). A Soap Company Launches A New Line Of Fragrance-free And Hypoallergenic Soaps B. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. It aims to develop a wider range of products, markets, investments, etc. b) A manufacturer of golf shoes acquiring a retailer of fishing rods and lures. A producer of canned soups acquiring a maker of breakfast cereals. Expansion/growth strategies 2. THE IMPORTANCE OF STRATEGIC MANAGEMENT 29. The objective of this index is to measure the pace, direction, degree, and areas of changes in a company's portfolio. A Horse Farm Buys An Insurance Agency C. Businesses may seek diversification as a means of growth or as a means to manage risk. Provide decreased profit margins for shareholders b. (Job Unrelated to Major) Many graduates find themselves in positions unrelated to their degrees or major. However, the 'unrelated diversification' strategy is far from full proof and there are numerous examples in which it has failed for Virgin. Although this example is somewhat extreme, the same basic rule applies to all investors. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. investors panic causing security prices around the globe to fall precipitously: Unsystematic risk: A. Print Options. QUESTION 12. The types are:- 1. In China's Hengduan Mountains region, a biodiversity hotspot uplifted over the last 8 million years, this rate does in fact show. Unrelated diversification involves no common strategic fit of the diversified firms lines of business. Unrelated diversification means moving from what you were offering to a total new product. Strategic management is _____. Typically, the best method of entry into a foreign market is the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control. ) corporate restructuring. have no effect on the demand for candy, because income is assumed constant along a demand curve e. There are different approaches to diversification in the investment world. fuel mix, 2. The following graph shows how the efficient. Diversification is main point for both types development related and unrelated. It is related if the activities of the businesses complement those of the firm’s present business in a way that increases or adds to the competitive advantage. All of the above All of the following are advantages of remaining in a single line of business except a. Let's take a portfolio with two assets. This past quarter gave us a good glimpse at the power of Disney's diversification. As controls, the equation includes one. Companies, 1950-1986 Notes: Beatrice, Continental Group, General Foods, RCA, Scovill, and Signal were taken over as the study was being. companies have seen wisdom in pursuing a strategy of diversification. Concentric diversification occurs when a firm adds related products or markets. In 1983, the year after he was named president, Ohga set forth on his new business strategy of consolidation and diversification. Font size Which of the following is the best example of unrelated do to succeed in using a strategy of unrelated diversification to produce. These diversification strategy pros and cons show that if you want to take a low-risk approach to investing, then this is one of the best options available today. You've written hundreds of pages of papers, reports, and analyses over your academic career. Businesses are said to be "related" when. 19) Which of the following is not something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and. Amazon's (Rare) Unrelated Diversification Strategy is a Worry Diversification is a corporate strategy in which a firm brings multiple businesses within its boundaries. Furthermore, these two assets are inversely related, so when the value of asset A goes up, the value of asset B goes down. Strategic fit allows an organization to achieve synergy. As per Chegg Q&A Guidelines you must answer first four sub-parts in case of a multiple sub-part question or only the first question in case of Multiple unrelated/different questions are posted by students. The ability to spread business risk over truly diverse businesses (as compared to related diversification which is limited to spreading risk only among businesses with strategic fit). Multi-Chapter Exams - Exam 2 Question 11 Previous Which of the following is the best example of unrelated diversification? O A manufacturer of cheeses acquiring a retail chain specializing in sports apparel A pizza chain acquiring a chain of hamburger outlets A TV broadcasting company buying a Hollywood movie studio o A producer of canned soups acquiring a maker of breakfast cereals O A chain. Question: Retrenching to a narrower diversification base: A. For example, when a notebook manufacturer starts to manufacture pencils and when they enter pencil manufacturing, then this is a horizontal diversification strategy. ) that increase the rate at which resident species divide and evolve to form new ones. The rationale behind this technique contends that a portfolio constructed of different. That came despite it being a rough three months for a. It is one of the most commonly used tools for this type of analysis due to its simplicity and ease of use. Frustrated by Mr Tweedy, who is convinced the chickens are organising a revolt, and the unreliable egg-laying of the birds, she plans a diversification strategy to grow the business and maximise profits. ) the better-off test (as it relates to a potential diversification move) c. (Ireland, Hoskisson& Michael 2006) A major reason for Campbell's failure to generate financial economies while using the unrelated diversification strategy is that the firm's approach to managing its core. Answer:A company's diversification strategy can be either related or unrelated to its original business. Study 20 Chapter 8 quiz flashcards from Jennifer E. 1 which of the following would not be something to look for in identifying a diversified company's strategy?. In a diversification strategy, the firm enters a new market with a new product. Diversification can be segmented into related diversification or unrelated diversification. A producer of canned soups acquiring a maker of breakfast cereals In companies pursuing a strategy of unrelated diversification, A. Diversification can't protect investors entirely from risk. Unfortunately, this industry is not well developed in India and the Indian labor force is not familiar with this type of manufacturing. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. Launching Prepaid cards. In companies pursuing a strategy of unrelated diversification, A. Start studying Strategic - Chapter 8. Endnotes: [1] The following is representative of the diversification critique: "For every shareholder who bought at a fraudulently inflated price, another shareholder has sold: The buyer's individual loss is offset by the seller's gain, investors can expect to win as often as lose from fraudulently distorted prices. Don't worry: Many new college graduates get writer's block when it comes to how to make a resume. The following article throws light upon the types of corporate strategy. 5 "Unrelated Diversification at. 17% and stock B has an average expected return of 6,24%, the portfolio standard deviation is 3,75% (check out the Portfolio Standard Deviation article on how to calculate the standard deviation of a portfolio). The goal of such diversification is to achieve strategic fit. The following web designs represent the most viewed pages by users over a 30 day period, Chegg: HubSpot: doesn't mean you should do as they do. Microsoft's corporate-level strategy: Related diversification Microsoft is a highly diversified company. Typically, the best method of entry into a foreign market is the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control. Diversification is main point for both types development related and unrelated. GENERAL MOTORS Unrelated Diversification Unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries During the 1930s and 1940s, general motors also diversified into electric tram transit systems in forty five major American cities (including new. Their business comes primarily from the United States but they want to engage in foreign direct investment in India. Each number thus tells you how far or how close you are from that perfect 0 where two variables are uncorrelated. Launching Prepaid cards. What is your assessment of the long-term attractiveness of the industries represented […]. Strategic management is _____. the left-hand molecule contains two bromine atoms. Tesla suffers from limited market presence. ) economies of scope g. A) A strategy for determining the firm's overall attitude toward growth and the way it will manage its businesses or product lines B) A strategy at the business unit or product line level that focuses on improving a firm's competitive position. Identify and explain the meaning and strategic significance of each of the following terms: a. Which one of the following is an example of systematic risk? A. A Corporate strategy is one that specifies what businesses a firm is in or wants to be in and what it wants to do with those businesses. The main basis for competitive advantage and improved. is ordinarily described as diversification and it can be materialized through internal R&D, licensing, merger and acquisitions, joint ventures or alliances. The diversification of Apple - Pingdom Royal. Perhaps the most high profile case is the short rise and rapid fall of Virgin Cola in the mid-1990s - following an ambitious, yet unsuccessful plan to compete with Coca-Cola and Pepsi. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. For example, if the shoe producer enters the business of clothing manufacturing. But still, in the long run, diversification strategy is one of the best growth strategy in the long run. a cultural practice B. 3) The two biggest drawbacks of pursuing unrelated diversification strategies are -Demanding managerial requirements and no potential for competitive advantage beyond what each individual business can generate on its own. An electrical equipment manufacturer acquiring a potato chip company. A producer of canned soups acquiring a maker of breakfast cereals. D) international expansion. First, an example using bullet points. , - Successful. on StudyBlue. 5 / 5 ( 5 votes ) Walt Disney case study - Read the attached case study and answer the following questions. none of these choices. a winery renting its tasting room, patio and garden for private receptions. What makes it unsystematic is that only a few firms tend make the same mistake at the same time. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. An example of each generic business-level strategy from the retail industry is illustrated below. This is NOT a paper. ' Both of the two theoretical perspectives lead us to expect that relatively more unrelated diversification will be associated with internal funds and relatively more related diversification will be associated with external funds, which leads to the following hypotheses. Let's look at two full examples of cover letter body text. The basic premise of unrelated diversification is: That any business that has good profit prospects and can be acquired on good financial terms is a good business to diversify into. A pizza chain acquiring a chain of hamburger outlets b. For example, assume the following returns of two stocks of a diversified portfolio: If stock A has an average expected return of 5. b-It can entail opportunities for cross-business use of a well-known and potent brand name. Diversification works because these assets react differently to the same economic event. Multi-Chapter Exams - Exam 2 Question 11 Previous Which of the following is the best example of unrelated diversification? O A manufacturer of cheeses acquiring a retail chain specializing in sports apparel A pizza chain acquiring a chain of hamburger outlets A TV broadcasting company buying a Hollywood movie studio o A producer of canned soups acquiring a maker of breakfast cereals O A chain. With a related diversification strategy you have the advantage of understanding the business and of knowing what the industry opportunities and threats are; yet a number of related. Since 2008, the firm has grown from around 50 employees to about 85 people. A supermarket chain acquiring an airline e. Which of the following is the best example of unrelated diversification? [a] Tootsie Roll merging with Hershey [b] Fort Motor Company merging with General Motors [c] McDonald’s merging with Burger King [d] Northwest Airlines merging with Greyhound Bus Which statement is true regarding management skills? [a] Technical skills are especially important for top managers [b] Good managers excel in. ' Both of the two theoretical perspectives lead us to expect that relatively more unrelated diversification will be associated with internal funds and relatively more related diversification will be associated with external funds, which leads to the following hypotheses. Broad target and advantage in cost: Walmart's cost leadership strategy depends on attracting a large customer base and keeping prices low by buying massive quantities of goods from suppliers. An electrical equipment manufacturer acquiring an athletic footwear company C. Ben Strubel's letter to investors for the month of March 2019, titled, "The Boeing Crashes Show The Benefits Of Diversification. This past quarter gave us a good glimpse at the power of Disney's diversification. When a company purchases another business that does something different from what the purchasing company does, the purchasing company is using a strategy of A. Different Types of Diversification Strategies. GENERAL MOTORS Unrelated Diversification Unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries During the 1930s and 1940s, general motors also diversified into electric tram transit systems in forty five major American cities (including new. However, its flagship product, the product which has been. For example, the company generates most of its revenues in the United States and has a small presence in China and the developing world. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. Pinnacle Inc. Please site at least 1. The main basis for competitive advantage and improved. related diversification: A process that takes place when a business expands its activities into product lines that are similar to those it currently offers. 9-43 Combination Related-Unrelated Diversification Strategies Dominant-business firms One major core business accounting for 50 - 80 percent of revenues, with several small related or unrelated businesses accounting for remainder Narrowly diversified firms Diversification includes a few (2 - 5) related or unrelated businesses Broadly. According to Strickland et al (2010), Diversification can be related or unrelated. which of the following is the best example of unrelated diversification a producer of men's apparel acquiring a maker of golf equipment which of the following is not part of the producre for evaluating the pluses and ,minuses of a fiversified company;s strategy and deciding what actions to take to improve the company's performance. Businesses are said to be "related" when they possess competitively valuable cross-business value-chain matchups. consumer spending on entertainment decreased nationally. d) A steel producer acquiring a hardware store. Which of the following is the best example of related diversification a manufacturer of dining room furniture acquiring a marker of patio furniture Which of the following are negatives or disadvantages of pursuing unrelated diversification strategies?. It is related if the activities of the businesses complement those of the firm’s present business in a way that increases or adds to the competitive advantage. Luckily for Coca-Cola, its investment paid off—Columbia was sold to Sony for $3. For investors in the U. A firm that is pursuing unrelated diversification takes the position of pursuing any avenue that may generate profit rather than being concerned with creating a strategic fit. The following web designs represent the most viewed pages by users over a 30 day period, Chegg: HubSpot: doesn't mean you should do as they do. Top 10 most viewed web design examples. That came despite it being a rough three months for a. When Dell launched its first smartphone in the U. , - Successful. C) The company has superior strategic management and organizational design. From the above table it is depicts t hat the following are the merits o f Unrelated diversification strategy for the above companies: Superior skills of top management people. Under related diversification the company makes easier the consumption of its products by producing complementing goods or offering complementing services. Exhibit 1 Diversification Profiles of 33 Leading U. selecting the best methods of communication) The Communication Process (Questions related to elements of the process, feedback and communication styles) Example Questions Continually shifting back and forth between the role of speaker and listener is_____. Recent examples of corporate diversification include the entries of Gillette into manufacture of felt-tip pens, John Deere into snowmobiles, and Texas Instruments into pocket calculators. Which one of the following is the best guideline for deciding what the priorities should be for allocating resources to the various businesses of a diversified company? Business subsidiaries with the brightest profit and growth prospects, appealing positions in that 9-cell attractiveness-strength matrix, and solid strategic and resource fits. Combination strategies. Reliance entered into retailing by allocating Rs25, 000 crore in a phased manner is a typical example. Businesses are said to be "related" when they possess competitively valuable cross-business value-chain matchups. d) A steel producer acquiring a hardware store. The Path to Diversification If the scope and breadth of company types and diversification strategies above are any indication, this is a journey that can vary dramatically from business to business. An electrical equipment manufacturer acquiring an athletic footwear company C. Top 4 Examples of Conglomerates Example #1 - Inorganic growth-Acquisition. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. Companies do this to achieve economies of scale and reduce costs. As controls, the equation includes one. Of course, this risk is always possible among all kinds of firms. Create value for shareholders c. ) the better-off test (as it relates to a potential diversification move) c. Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification? a. Answer: FALSE Diff: 1. The diversification strategy used by DECC is a great example of identifying a new application from a lead, quoting the application, successfully testing and applying the product, and then tailoring marketing needs to the specific customers in that particular niche. in order to be more successful or reduce risk. A cigarette maker diversifying into packaged food. ) corporate restructuring. Which of the following are negatives or disadvantages of pursuing unrelated diversification strategies? Which of the following is the best example of unrelated diversification? back 4. 13 “Unrelated Diversification at Berkshire Hathaway”). These diversification strategy pros and cons show that if you want to take a low-risk approach to investing, then this is one of the best options available today. is an attractive strategy option for revamping a diverse business. A PC producer acquiring a producer of MP3's and tablets c. Unfortunately, this industry is not well developed in India and the Indian labor force is not familiar with this type of manufacturing. For example, oil drilling and oil refining are highly correlated, related industries. This strategy entailed strengthening such existing products as Betamax, strengthening the semiconductor business, establishing Sony as a top-ranking tape manufacturer and developing new businesses in areas like. Related, Unrelated, and Multinational Diversification As Forms of Business Strategy Unrelated, and Multinational Diversification As. Having experience in the stock market myself, I've tried many formulas some co-professionals and experts recommended to me. d) A steel producer acquiring a hardware store. Provide decreased profit margins for shareholders b. Assignment Questions: 1. Which of the following is the best example of unrelated diversification? [a] Tootsie Roll merging with Hershey [b] Fort Motor Company merging with General Motors [c] McDonald's merging with Burger King [d] Northwest Airlines merging with Greyhound Bus Which statement is true regarding management skills? [a] Technical skills are especially important for top managers [b] Good managers excel in. In 1983, the year after he was named president, Ohga set forth on his new business strategy of consolidation and diversification. There are different approaches to diversification in the investment world. The basic idea behind diversification is that the good performance of some investments balances or outweighs the negative performance of other investments. But now you're facing the hardest writing assignment of all, the one-page resume. A TV broadcasting company buying a Hollywood movie studio c. Diversification can be segmented into related diversification or unrelated diversification. which of the following is the BEST example of unrelated diversification? a producer of men's apparel acquiring a maker of golf equipment. The following are the main points from Chapter 6: Specify the components of sustainable competitive advantage and explain why it is important. Corporate diversification within the airline business has a long history. Best Online Brokers (for example, +0. Businesses are said to be "related" when they possess competitively valuable cross-business value-chain matchups. Related diversification makes more sense than unrelated because the company shares assets, skills, or capabilities. Diversification is main point for both types development related and unrelated. This internal strategic factor is a weakness that limits business growth based on the rapid economic development of overseas markets. Expansion/growth strategies 2. Just answer each question fully and completely. Corporate diversification. d) A steel producer acquiring a hardware store. Given the widespread empirical phenomenon of diversification, it is not clear that corporate policies should encourage managers to focus solely on firm value. , which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries (Figure 8. However, the ‘unrelated diversification’ strategy is far from full proof and there are numerous examples in which it has failed for Virgin. A chain of radio stations acquiring TV stations B. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. Perhaps the most high profile case is the short rise and rapid fall of Virgin Cola in the mid-1990s - following an ambitious, yet unsuccessful plan to compete with Coca-Cola and Pepsi. A producer of canned soups acquiring a maker of breakfast cereals In companies pursuing a strategy of unrelated diversification, A. which of the following is the best example of unrelated diversification a producer of men's apparel acquiring a maker of golf equipment which of the following is not part of the producre for evaluating the pluses and ,minuses of a fiversified company;s strategy and deciding what actions to take to improve the company's performance. Cobranded with yahoo. Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers. For example, the triangle Manufacturing Company, a fitness products maker, which is clearly unrelated to the firm's core products. is a strategy best reserved for companies in poor financial shape. Font size Which of the following is the best example of unrelated diversification? Which one of the following is NOT something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and beyond what the businesses could generate operating. Rowenta Steamforce Iron. The rationale behind this technique contends that a portfolio constructed of different. Pinnacle Inc. Many of the first airlines were initiated as related sub-ventures by existing transport-focused organisations; such as United Airlines, which can trace its lineage to Boeing Air Transport in 1927 (Rodgers, 1996). ) strategic fit f. Diversification is main point for both types development related and unrelated. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. A Restaurant Supply Company Buys A Chain Of Restaurants D. Which of the following is the best example of unrelated diversification? A producer of mens apparel acquiring a maker of golf equipment. (Job Unrelated to Major) Many graduates find themselves in positions unrelated to their degrees or major. For example, the company generates most of its revenues in the United States and has a small presence in China and the developing world. Identify and explain the meaning and strategic significance of each of the following terms: a. Expansion/growth strategies 2. Diversification is major tool of corporate level strategies. In this article, we will look at how correlation affects the diversification benefits of a portfolio. ) related diversification d. pursuing unrelated diversification. In companies pursuing a strategy of unrelated diversification, A. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. Perhaps the most high profile case is the short rise and rapid fall of Virgin Cola in the mid-1990s - following an ambitious, yet unsuccessful plan to compete with Coca-Cola and Pepsi. Top 10 most viewed web design examples. Diversification Example Suppose that asset A has a high rate of return and a high variance (risk rate), while asset B has a low rate of return and a low variance. Answer: FALSE Diff: 1. 4 billion. The basic premise of unrelated diversification is: That any business that has good profit prospects and can be acquired on good financial terms is a good business to diversify into. We may distinguish between related and unrelated diversification (Aaker, 1992). An electrical equipment manufacturer acquiring an athletic footwear company C. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. pursuing unrelated diversification. A producer of men's apparel acquiring a maker of golf equipment. Related Diversification Unrelated Diversification The following set of slides explain the differences in detailBUSM 3200- Strategic Management (Jan 2013) GDS 6-32 33. However, the ‘unrelated diversification’ strategy is far from full proof and there are numerous examples in which it has failed for Virgin. The purpose of diversification ensures that with investments in different and unrelated industries, you minimize your losses. true or false? false one of the risks of vertical integration is that they may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. Started only as an online shop for selling physical books in 1997, today Amazon sells anything that can be sold online in the global scale. Diversification is a corporate strategy in which a firm brings multiple businesses within its boundaries. Diversification can be segmented into related diversification or unrelated diversification. Which of the following is the best example of unrelated diversification? (1 point) a. Johnson and Johnson's strategy throughout the past decade has been the acquisition of companies around the globe. Businesses are said to be "related" when they possess competitively valuable cross-business value-chain matchups. Endnotes: [1] The following is representative of the diversification critique: "For every shareholder who bought at a fraudulently inflated price, another shareholder has sold: The buyer's individual loss is offset by the seller's gain, investors can expect to win as often as lose from fraudulently distorted prices. Retrenchment strategies and 4. Different Types of Diversification Strategies. 1 which of the following would not be something to look for in identifying a diversified company's strategy?. A PC producer acquiring a producer of MP3's and tablets c. These diversification strategy pros and cons show that if you want to take a low-risk approach to investing, then this is one of the best options available today. , - Successful. Accordingly, there are different levels of diversification. With that in mind, the following are some of the best irons you can purchase today, all of which will help you maintain a wrinkle-free wardrobe. A Soap Company Launches A New Line Of Fragrance-free And Hypoallergenic Soaps B. QUESTION 12. What makes it unsystematic is that only a few firms tend make the same mistake at the same time. Reliance entered into retailing by allocating Rs25, 000 crore in a phased manner is a typical example. When a company purchases another business that does something different from what the purchasing company does, the purchasing company is using a strategy of A. Which one of the following is the best guideline for deciding what the priorities should be for allocating resources to the various businesses of a diversified company? Business subsidiaries with the brightest profit and growth prospects, appealing positions in that 9-cell attractiveness-strength matrix, and solid strategic and resource fits. Businesses are said to be "related" when. Firms may vary in the extent to which they diversify the mix of businesses they pursue, and this is usually decided by their relatedness. Telling your story well will set you apart as an applicant and, most importantly, help you secure your dream internship or job. A pizza chain acquiring a chain of hamburger outlets. According to Strickland et al (2010), Diversification can be related or unrelated. One school of thought is that diversification is really "de-worse-ification. Perhaps the most high profile case is the short rise and rapid fall of Virgin Cola in the mid-1990s – following an ambitious, yet unsuccessful plan to compete with Coca-Cola and Pepsi. Johnson and Johnson's strategy throughout the past decade has been the acquisition of companies around the globe. for example if u were offering clothes through ur cloth industry, and u move onto food industry, then it. (Ireland, Hoskisson& Michael 2006) A major reason for Campbell's failure to generate financial economies while using the unrelated diversification strategy is that the firm's approach to managing its core. in order to be more successful or reduce risk. Expansion/growth strategies 2. An electrical equipment manufacturer acquiring an athletic footwear company C. GENERAL MOTORS Unrelated Diversification Unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries During the 1930s and 1940s, general motors also diversified into electric tram transit systems in forty five major American cities (including new. But still, in the long run, diversification strategy is one of the best growth strategy in the long run. Nahm said there are plans in the works to acquire or develop more to fit the healthy-snack niche. Two examples of growth strategy are: Merging of Mauritius telecom. com and eBay are examples of companies that d. The pros and cons of diversification. Print Options. This doesn't mean that what you learned in college is useless. Which of the following is the best example of UNrelated diversification? a. Which of the following is the best example of unrelated diversification? A producer of mens apparel acquiring a maker of golf equipment. retrenchment Ans: b Page: 181. Identify and explain the meaning and strategic significance of each of the following terms: a. - This article aims to take a fresh look at diversification - a growth strategy often disparaged by managers and commentators alike, yet one that is followed successfully by some major organizations. Diversification and the Multibusiness Corporation דיויד שוגרמן David Sugarman The point of time chosen to be related to and as the basic reference point is the year the paper was published- 1994. Given the widespread empirical phenomenon of diversification, it is not clear that corporate policies should encourage managers to focus solely on firm value. MGT603 Strategic Management Solved MCQs Set 4 Print; View Comments. Started only as an online shop for selling physical books in 1997, today Amazon sells anything that can be sold online in the global scale. which of the following is the best example of unrelated diversification a producer of men's apparel acquiring a maker of golf equipment which of the following is not part of the producre for evaluating the pluses and ,minuses of a fiversified company;s strategy and deciding what actions to take to improve the company's performance. Diversification works because these assets react differently to the same economic event. is ordinarily described as diversification and it can be materialized through internal R&D, licensing, merger and acquisitions, joint ventures or alliances. Which of the following is the best example of unrelated diversification? A digital camera manufacturer acquiring a maker of athletic footwear The two biggest drawbacks or disadvantages of pursuing unrelated diversification strategies are. unrelated diversification B. With that in mind, the following are some of the best irons you can purchase today, all of which will help you maintain a wrinkle-free wardrobe. Unrelated diversification: Unrelated diversification lacks commonality in markets, distribution channels, production technology, and R&D thrust to provide the opportunity for synergy through the exchange or sharing of assets or skills. Identify and explain the meaning and strategic significance of each of the following terms: a. on StudyBlue. One of these is the basic diversified portfolio. A Restaurant Supply Company Buys A Chain Of Restaurants D. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. The reasons to consider this alternative are primarily seeking more attractive opportunities for growth in which to invest available. That said, there is no one best strategy to select, with each offering different benefits to companies in various circumstances. one another. 1 which of the following would not be something to look for in identifying a diversified company's strategy?. An electrical equipment manufacturer acquiring an athletic footwear company C. The key to growth, explains the author, in large part lies in finding "the right revenue mix," which, depending on the organization, may involve multiple funding sources or concentration on one source type. With no expected loss from fraud on the market, shareholders do not need. Corporate diversification within the airline business has a long history. GENERAL MOTORS Unrelated Diversification Unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries During the 1930s and 1940s, general motors also diversified into electric tram transit systems in forty five major American cities (including new. Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification? A) The company has to achieve coordination between business units. Unrelated diversification is based on the dominant concept that any company that can be acquired on good financial terms and offers good prospects for profitability is a good business to diversify into. ) that increase the rate at which resident species divide and evolve to form new ones. Nonsystematic Risk Risk that is unique to a certain asset or company. Morgan Stanley's building of a casino in Atlantic City is a good example of related diversification. which one of the following is not something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and beyond what the businesses could generate operating as stand alone entities?. The right-hand molecule contains three bromine atoms. A newsprint manufacturer acquiring a chain of newspapers. Many of the first airlines were initiated as related sub-ventures by existing transport-focused organisations; such as United Airlines, which can trace its lineage to Boeing Air Transport in 1927 (Rodgers, 1996). oriented to short-run performance of an organization c. d) A steel producer acquiring a hardware store. Although this example is somewhat extreme, the same basic rule applies to all investors. A) A strategy for determining the firm's overall attitude toward growth and the way it will manage its businesses or product lines B) A strategy at the business unit or product line level that focuses on improving a firm's competitive position. Which of the following is the best example of unrelated diversification? A producer of mens apparel acquiring a maker of golf equipment. Amazon's (Rare) Unrelated Diversification Strategy is a Worry. The previous product of the company was telephone line but it spends $120 billion for the acquisition of cable television. Divestment can be especially appealing to executives in charge of firms that have engaged in unrelated diversification. A chain of radio stations acquiring TV stations B. Investors often struggle to understand the complexity of diversified firms, and this can result in relatively poor performance by the stocks of such firms. fuel mix, 2. Alphabet b. Conditions in present industry turn sour & expected to be long lasting; There are opportunities to expand into industries whose technologies & products complement its present business. It can help improve your potential for investment success. Just answer each question fully and completely. b-It can entail opportunities for cross-business use of a well-known and potent brand name. Submitted for the IIM-A Consulting Blog Competition. makes video editing hardware for the television and movie industries. Which of the following is the best example of unrelated diversification? A. We used this phylogeny to carry out the following aims: (1) estimate the age and ancestral range of Sticta, (2) infer the colonization history of Hawaii (3) determine if primary photobiont (green-algal and cyanobacterial) associations affect diversification, and (4) investigate if tectonic activity in the Andes has affected diversification. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. For example a dairy, producing cheese adds a new type of cheese to its products. Each number thus tells you how far or how close you are from that perfect 0 where two variables are uncorrelated. Telling your story well will set you apart as an applicant and, most importantly, help you secure your dream internship or job. Best answer Answer: C Explanation: C) At the level of functional strategy, managers in specific areas such as marketing, finance, and operations decide how best to achieve corporate goals by performing their functional activities most effectively. INTRODUCTION Diversification [dih-vur-suh-fi-key-shuhn], noun"Diversification is a form of corporate strategy for a company. 19) Which of the following is not something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and. Corporate diversification. The right-hand molecule contains three bromine atoms. "The thought is that all your money should be put in your best investment ideas. According to Strickland et al (2010), Diversification can be related or unrelated. Explanation: B) If the businesses are not similar, the strategy is called unrelated diversification. Sometimes, financial markets lose value at the same time, and nearly every stock, bond, or fund loses value. Which of the following is NOT an example of unrelated diversification? a) Homebuilder acquiring a forest products company. e) An online merchandiser acquiring a retail supermarket that specializes in natural and. The company has broad organizational competencies that can be transferred. Which of the following is the best example of unrelated diversification? A digital camera manufacturer acquiring a maker of athletic footwear The two biggest drawbacks or disadvantages of pursuing unrelated diversification strategies are. The Impact of Unrelated Diversification on Firm Value 1 Chapter 1. Let's further assume that you could invest all $1 million in your employer's stock, or you could invest 50% in your. Started only as an online shop for selling physical books in 1997, today Amazon sells anything that can be sold online in the global scale. Corporate Strategy - ITT. For example, the AT&T Company in America is involved in the application of concentric diversification strategy by adding cable lines for fast internet services across the country. A business diversifies by expanding into a new product or market. Alphabet b. In this case there is no direct connection with the company´s existing business - this diversification is classified as unrelated. The new brand joins other better-for-you choices under the Hershey umbrella such as Brookside. Treasurys, it's a little like hitting the local coffee shop for a small mocha. An industrialist building new plants in a country where operation costs are low. It can help improve your potential for investment success. Submitted for the IIM-A Consulting Blog Competition. An example of each generic business-level strategy from the retail industry is illustrated below. Which of the following is the best example of unrelated diversification? A producer of men's apparel acquiring a maker of golf equipment. resource type, 3. ) that increase the rate at which resident species divide and evolve to form new ones. The company has broad organizational competencies that can be transferred. Vertical Diversification occurs when the company goes back to previous stages of its production cycle or moves forward to subsequent stages of the same cycle - production of raw materials or distribution of the final product. For example, a manufacturer of computers might begin making calculators as a form of related diversification of its existing business. Which of the following is the best example of unrelated diversification? (1 point) a. For example, a dairy company producing cheese adds a new variety of cheese to its product line. Diversification can't protect investors entirely from risk. Mrs Tweedy owns a chicken farm from which she sells eggs. There is no explanition. Similarly, unrelated diversifiers often benefit from the best practices of sister businesses even though their products, markets, and technologies may differ dramatically. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. A business diversifies by expanding into a new product or market. The diversification of Apple - Pingdom Royal. C) vertical integration. Of course, this risk is always possible among all kinds of firms. on StudyBlue. The three tests for judging whether a particular diversification move can create added long-term value for shareholders are back 4 The industry attractiveness test, the cost-of-entry test, and the better-off test. 4 billion. During the past 25 years an increasing proportion of U. is ordinarily described as diversification and it can be materialized through internal R&D, licensing, merger and acquisitions, joint ventures or alliances. Related, Unrelated, and Multinational Diversification As Forms of Business Strategy Unrelated, and Multinational Diversification As. Font size Which of the following is the best example of unrelated do to succeed in using a strategy of unrelated diversification to produce. CHOOSING THE DIVERSIFICATION PATH: RELATED VERSUS UNRELATED BUSINESSES ♦ Related Businesses Have competitively valuable cross-business value chain and resource matchups. 16: When Coca-Cola spends huge amounts on advertising in an attempt to create a positive image for its Classic Coke, this is an example of: A) a stuck-in-the-middle. Unrelated diversification is based on the dominant concept that any company that can be acquired on good financial terms and offers good prospects for profitability is a good business to diversify into. That said, there is no one best strategy to select, with each offering different benefits to companies in various circumstances. is an attractive strategy option for revamping a diverse business. A pizza chain acquiring a chain of hamburger outlets b. a set of managerial decisions and actions b. The term inorganic growth refers to expansion by a corporation by taking over other. Assignment Questions: 1. That the Mac is growing as a platform, even relative to other non-Apple operating systems, is also supported by data from other sources, like OS statistics from StatCounter. For those in the market to purchase U. Definition: Unrelated Diversification. d) A steel producer acquiring a hardware store. com and eBay are examples of companies that d. In companies pursuing a strategy of unrelated diversification, A. related diversification: A process that takes place when a business expands its activities into product lines that are similar to those it currently offers. ) that increase the rate at which resident species divide and evolve to form new ones. Firms may vary in the extent to which they diversify the mix of businesses they pursue, and this is usually decided by their relatedness. In this case there is no direct connection with the company´s existing business - this diversification is classified as unrelated. Conditions in present industry turn sour & expected to be long lasting; There are opportunities to expand into industries whose technologies & products complement its present business. An electrical equipment manufacturer acquiring an athletic footwear company C. Related diversification provides the potential to obtain synergies by the exchange or. Pepsi co diversification strategy case analysis 1. An electrical equipment manufacturer acquiring a potato chip company. A good fit can create additional value; a bad one can destroy value. But it does require a different approach when it comes to writing a cover letter. resource type, 3. There are three basic types of diversification strategies that may composed of several plans that range from the designed and development of new products to the licensing of these new technologies. ) economies of scope g. Multi-Chapter Exams - Exam 2 Question 11 Previous Which of the following is the best example of unrelated diversification? O A manufacturer of cheeses acquiring a retail chain specializing in sports apparel A pizza chain acquiring a chain of hamburger outlets A TV broadcasting company buying a Hollywood movie studio o A producer of canned soups acquiring a maker of breakfast cereals O A chain. whether the company's diversification is based narrowly in a few industries or broadly in many industries, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest weak businesses, build positions in new industries, and strengthen the positions of its existing businesses. With a related diversification strategy you have the advantage of understanding the business and of knowing what the industry opportunities and threats are; yet a number of related. The following four points constitute the cornerstones of Amazon business strategy: 1. Related: Systematic risk. Even the stocks of trucking and airline companies move up and down together to some extent, as oil prices fluctuate. Here are a few examples of different kinds of diversification and how they can reduce risk. Which of the following is not one of the appeals or benefits of related diversification? a-It can offer opportunities for transferring competitively valuable expertise, technological know-how, or other valuable resources from one business to another. B) The company has narrow organizational competencies. ) corporate restructuring. Diversification is main point for both types development related and unrelated. What is your assessment of the long-term attractiveness of the industries represented […]. Which of the following is the best example of unrelated diversification? A. For example, if an oil crisis occurs in Saudi, only your investments…. Launching of music Café. Unrelated development of starbucks can be following: 1. Which of the following are negatives or disadvantages of pursuing unrelated diversification strategies? back 3 No potential for competitive advantage beyond any benefits of corporate parenting and what each individual business can generate on its own. A producer of canned soups acquiring a maker of breakfast cereals. For each of the following choose the answer that most completely answers the question. There are two types of diversification a firm can employ: 1. Identify and explain the meaning and strategic significance of each of the following terms: a. on August 24, early product reviews were dismal. Which of the following is the best example of UNrelated diversification? a. The rationale behind this technique contends that a portfolio constructed of different. For example, if the annualized volatility of the asset class is 10% (using monthly data) and 12% (using annual data), we index the annual holding-period volatility as 120% of the monthly holding-period volatility. ) strategic fit f. Let's look at two full examples of cover letter body text. A Restaurant Supply Company Buys A Chain Of Restaurants D. Helps a company escape the rigors of competition in its present business d. diversification, and the squared term for produc t diversification, ca pture the hypothesized nonlinear relationships as specified in H1a, H1b, and H2. is an attractive strategy option for revamping a diverse business. During the past 25 years an increasing proportion of U.
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