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What are the advantages of related diversification?One of the key advantages of related diversification is the ability to share key resources across different areas. Key resources and capabilities of the firm can be utilized in a new area – potentially giving the firm a competitive advantage relative to other firms that may not pose comparable resources.
How does diversification help competitive advantage?Diversification can be a valuable strategy for profit and growth. A company can expand its products or services to gain an edge on the competition and a headstart on inevitable changes in the marketplace.
What are the two ways an unrelated diversification strategy can create value through financial economies quizlet?An unrelated diversification strategy can create value through two types of financial economies: (1) efficient internal capital allocations, and (2) purchasing other firms, restructuring their assets, and selling them.
What is an advantage associated with unrelated diversification?If one of your businesses struggles through a seasonal, year-long or multi-year dip, businesses in unrelated categories could still thrive. This diversification helps you protect against major pitfalls of business downturns, points out marketing consultant Preston Martelly.
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