Question

Diversification may dissipate value if it is wrongly based on: a. transferring competencies. b. realizing economies of scope. c. rescuing core business. d. leveraging existing competencies. e. acquisitions and restructuring.

Answer 1

Answer:

C. rescuing core business.

Explanation:

Diversification: It is a process of expanding the business by allocating investment in several other related businesses. This is a way to reduce risk on any particular asset or business and it also helps in covering the loss of one business. A company should pursue related diversification instead of unrelated diversification when the company's core skills are highly specialized and have few applications outside its core business.