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

Which of the following is the best example of unrelated diversification? (1 point) a. C) The company has superior strategic management and organizational design. Launching Prepaid cards. A cigarette maker diversifying into packaged food. 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. The rationale behind this technique contends that a portfolio constructed of different. Companies do this to achieve economies of scale and reduce costs. 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. An electrical equipment manufacturer acquiring an athletic footwear company C. The following are the main points from Chapter 6: Specify the components of sustainable competitive advantage and explain why it is important. A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders. With no expected loss from fraud on the market, shareholders do not need. 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. What are the differences between related and unrelated diversification? Why would an organization select a related or unrelated diversification strategy over the other? Explain with examples of related and unrelated diversification. a winery renting its tasting room, patio and garden for private receptions. Learn vocabulary, terms, and more with flashcards, games, and other study tools. A pizza chain acquiring a chain of hamburger outlets. 4 billion. 5 / 5 ( 5 votes ) Walt Disney case study - Read the attached case study and answer the following questions. Overall, earnings were up 11% over the prior-year quarter. Investors often struggle to understand the complexity of diversified firms, and this can result in relatively poor performance by the stocks of such firms. The following four points constitute the cornerstones of Amazon business strategy: 1. 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 example, if an oil crisis occurs in Saudi, only your investments…. Which of the following is NOT an example of unrelated diversification? a) Homebuilder acquiring a forest products company. It requires each company to take an equity stake in the new venture. There is no explanition. This is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries (Figure 8. 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. The following are the types of diversification strategies: Horizontal Diversification. However, the ‘unrelated diversification’ strategy is far from full proof and there are numerous examples in which it has failed for Virgin. Morgan Stanley's building of a casino in Atlantic City is a good example of related diversification. Johnson and Johnson's strategy throughout the past decade has been the acquisition of companies around the globe. For example, if the shoe producer enters the business of clothing manufacturing. 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. 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. one another. A TV broadcasting company buying a Hollywood movie studio c. Unrelated diversification means moving from what you were offering to a total new product. The strategy is loaded with hurdles because it requires a lot of investment and a lot of man power as well as focus of the top management. The goal of such diversification is to achieve strategic fit. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. Related diversification makes more sense than unrelated because the company shares assets, skills, or capabilities. A Soap Company Launches A New Line Of Fragrance-free And Hypoallergenic Soaps B. Which of the following is the best example of unrelated diversification? A producer of men's apparel acquiring a maker of golf equipment. b) A manufacturer of golf shoes acquiring a retailer of fishing rods and lures. First, an example using bullet points. 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. 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. A producer of golf balls diversifying into camera manufacturing d. 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. What are the differences between related and unrelated diversification? Why would an organization select a related or unrelated diversification strategy over the other? Explain with examples of related and unrelated diversification. What makes it unsystematic is that only a few firms tend make the same mistake at the same time. Overall, earnings were up 11% over the prior-year quarter. 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. Similarly, unrelated diversifiers often benefit from the best practices of sister businesses even though their products, markets, and technologies may differ dramatically. Which of the following is the best example of UNrelated diversification? a. For example, you may need to communicate how your history major will help you succeed in sales. In China's Hengduan Mountains region, a biodiversity hotspot uplifted over the last 8 million years, this rate does in fact show. Divestment can be especially appealing to executives in charge of firms that have engaged in unrelated diversification. 1 which of the following would not be something to look for in identifying a diversified company's strategy?. 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. Unrelated diversification means moving from what you were offering to a total new product. It has various unrelated business divisions including FMCG, Hotels, Paper & Packaging, Agribusiness etc. Butler and Domian (1991) is an early contribution to the decades-long debate on time diversification and portfolio risk. In companies pursuing a strategy of unrelated diversification, A. ) unrelated diversification e. Under related diversification the company makes easier the consumption of its products by producing complementing goods or offering complementing services. a publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification. 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. Launching of music Café. 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. THE IMPORTANCE OF STRATEGIC MANAGEMENT 29. This is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm's existing industry or industries (Figure 8. 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. Expansion/growth strategies 2. affect quantity demanded only if candy is a normal good. Study 20 Chapter 8 quiz flashcards from Jennifer E. ) related diversification d. 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. 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. Northwest Airlines provides air travel for the public, whereas Procter & Gamble manufactures consumer goods. 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. The following are the types of diversification strategies: Horizontal Diversification. The reasons to consider this alternative are primarily seeking more attractive opportunities for growth in which to invest available. 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. Amazon's (Rare) Unrelated Diversification Strategy is a Worry Diversification is a corporate strategy in which a firm brings multiple businesses within its boundaries. Cobranded with yahoo. It can help improve your potential for investment success. affect the demand for candy through the income effect of a price change b. However, the 'unrelated diversification' strategy is far from full proof and there are numerous examples in which it has failed for Virgin. This past quarter gave us a good glimpse at the power of Disney's diversification. a winery renting its tasting room, patio and garden for private receptions. A newsprint manufacturer acquiring a chain of newspapers. Which of the following is the best example of unrelated diversification? A digital camera manufacturer acquiring a maker of athletic footwear Based on the info in Figure 8. Unfortunately, this industry is not well developed in India and the Indian labor force is not familiar with this type of manufacturing. makes video editing hardware for the television and movie industries. A key tenet of a transnational strategy is improved adaptation to all competitive situations as. An electrical equipment manufacturer acquiring a potato chip company. The Impact of Unrelated Diversification on Firm Value 1 Chapter 1. Introduction. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. which of the following is the BEST example of unrelated diversification? a producer of men's apparel acquiring a maker of golf equipment. Telling your story well will set you apart as an applicant and, most importantly, help you secure your dream internship or job. This enables J&J to offer a wide variety of products and services, thus creating a diverse organization in consumer, pharmaceutical and medical/diagnostic products. This past quarter gave us a good glimpse at the power of Disney's diversification. In this case there is no direct connection with the company´s existing business - this diversification is classified as unrelated. Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. Accordingly, there are different levels of diversification. Create value for shareholders c. Cash cows represent the organization's best long-run. That came despite it being a rough three months for a. The reasons to consider this alternative are primarily seeking more attractive opportunities for growth in which to invest available. What are the differences between related and unrelated diversification? Why would an organization select a related or unrelated diversification strategy over the other? Explain with examples of related and unrelated diversification. If you're a new college graduate, resumes are likely a […]. 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?. 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. Overall, earnings were up 11% over the prior-year quarter. The Impact of Unrelated Diversification on Firm Value 1 Chapter 1. For example, if the shoe producer enters the business of clothing manufacturing. A chain of radio stations acquiring TV stations B. a set of managerial decisions and actions b. Businesses can diversify by concentration. To identify problems, opportunities, and strategic actions that would sustain its impressive financial and market performance. D) international expansion. Here are a few examples of different kinds of diversification and how they can reduce risk. Which of the following is the BEST example of unrelated diversification? asked Jun 15, Best answer. ) strategic fit f. A key tenet of a transnational strategy is improved adaptation to all competitive situations as. With no expected loss from fraud on the market, shareholders do not need. Which of the following is the best example of unrelated diversification? (1 point) a. If the company. vertical integration. c-Related diversification is particularly well-suited. related diversification: A process that takes place when a business expands its activities into product lines that are similar to those it currently offers. The goal of such diversification is to achieve strategic fit. 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. This strategy of diversification refers to an entity offering new services or developing new products that appeal to the firm's current customer base. Corporate Tinkertoys: Diversification and Integration around the airline industry American Airlines United Airlines National Rent-a-Car Boeing. 13 "Unrelated Diversification at Berkshire Hathaway"). a winery renting its tasting room, patio and garden for private receptions. ) related diversification d. Learn the strategic difference between related andLearn the strategic difference between related and unrelated diversification strategies. 4 billion. 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. ) divestiture h. Mauritius Telecom is a telecommunications and Internet service provider in Mauritius. Which of the following is the best example of unrelated diversification? A digital camera manufacturer acquiring a maker of athletic footwear Based on the info in Figure 8. In companies pursuing a strategy of unrelated diversification, A. The oil-company examples show that fit between parent and businesses is a two-edged sword. ) the attractiveness test (as it relates to a potential diversification move) b. A newsprint manufacturer acquiring a chain of newspapers. 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. unrelated diversification e. Start studying Strategic - Chapter 8. The following are the types of diversification strategies: Horizontal Diversification. However, its flagship product, the product which has been. 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. Butler and Domian (1991) is an early contribution to the decades-long debate on time diversification and portfolio risk. The animated movie Chicken Run is a feature-length example of related diversification. Answer: TRUE Diff: 1 Question Status: Previous edition 3) Diversification among stocks in different industries will usually avoid fluctuations in stock values due to general economic conditions. Strategic management is _____. makes video editing hardware for the television and movie industries. ) economies of scope g. Concentric diversification occurs when a firm adds related products or markets. vertical integration. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification. 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. Diversification across asset classes is another way to help reduce portfolio risk. Which of the following is not a characteristic of strategic alliances entered into to support related diversification? a. 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. is an attractive strategy option for revamping a diverse business. which of the following is the BEST example of unrelated diversification? a producer of men's apparel acquiring a maker of golf equipment. This is a good example ofunrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries ("Unrelated Diversification at Berkshire Hathaway" [Image missing in original]). Which of the following is not one of the appeals of an unrelated diversification strategy? A. Launching of music Café. Rumelt provided the best known framework for categorizing diversification. on August 24, early product reviews were dismal. --Hershey will soon launch its SoFit brand, a line of fruit and protein squeezes, snack squares, and nut and seed packets, reported Convenience Store Products. A producer of canned soups acquiring a maker of breakfast cereals Answer:b. For each of the following choose the answer that most completely answers the question. Of course, this risk is always possible among all kinds of firms. An example of each generic business-level strategy from the retail industry is illustrated below. According to Strickland et al (2010), Diversification can be related or unrelated. 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. unrelated diversification: A term which refers to the manufacture of diverse products which have no relation to each other. A Horse Farm Buys An Insurance Agency C. Expansion/growth strategies 2. Provide decreased profit margins for shareholders b. Ans: T Page: 200. for example if u were offering clothes through ur cloth industry, and u move onto food industry, then it. For example, the triangle Manufacturing Company, a fitness products maker, which is clearly unrelated to the firm's core products. If, for example, you buy 30 stocks, all of whose issuers operate in the hotel industry, even the best of your stocks will be dragged down by a decline in business travel that results from increasing use of teleconferencing. unrelated diversification B. 13 "Unrelated Diversification at Berkshire Hathaway"). 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. 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. Northwest Airlines provides air travel for the public, whereas Procter & Gamble manufactures consumer goods. can be effectively eliminated by portfolio diversification. A pizza chain acquiring a chain of hamburger outlets. B) concentration on a single business. for example if u were offering clothes through ur cloth industry, and u move onto food industry, then it. Morgan Stanley's building of a casino in Atlantic City is a good example of related diversification. Investors often struggle to understand the complexity of diversified firms, and this can result in relatively poor performance by the stocks of such firms. a set of managerial decisions and actions b. Focus Questions: 1. Corporate Tinkertoys: Diversification and Integration around the airline industry American Airlines United Airlines National Rent-a-Car Boeing. Best Online Brokers (for example, +0. 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 chain of radio stations acquiring TV stations B. This is a good example of unrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries (Figure 8. Businesses are said to be "related" when. This past quarter gave us a good glimpse at the power of Disney's diversification. C) vertical integration. 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. 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. Provide decreased profit margins for shareholders b. B)work best when they aim at lowering the costs of performing those tasks and activities where the company has core competencies and distinctive competencies. But still, in the long run, diversification strategy is one of the best growth strategy in the long run. The two molecules are unrelated. For example, if the shoe producer enters the business of clothing manufacturing. 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. Or an extra large, an extra-extra large - and. For example, a metals distributor who needs a larger warehouse may contract with a manufacturing company that has a processing facility with extra space. "The thought is that all your money should be put in your best investment ideas. Amazon's (Rare) Unrelated Diversification Strategy is a Worry. They may also be a combination of these plans with two or more of it included. Position-level: Suppose you invested your entire life savings into Domino's Pizza stock. A chain of radio stations acquiring TV stations B. It is very interesting to discuss corporate level strategy of Nike. A Restaurant Supply Company Buys A Chain Of Restaurants D. horizontal diversification. consumer spending on entertainment decreased nationally. 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. There are different risks inherent in each generic strategy, but being "all things to all people" is a sure recipe for mediocrity - getting "stuck in the middle". Predominant research in the. Alphabet b. Related diversification is one of the two variants of diversification strategy. There are different approaches to diversification in the investment world. Corporate diversification. Divestment also serves as a means to undo diversification strategies. A chain of radio stations acquiring TV stations B. Two examples of growth strategy are: Merging of Mauritius telecom. 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. Which of the following best describes the statement? Retrenchment Horizontal diversification Market development Horizontal integration Horizontal diversification: Adding new, unrelated products or services for present customers Page#80 PG#92Adding new, unrelated products or services for present customers is. d) A steel producer acquiring a hardware store. B)work best when they aim at lowering the costs of performing those tasks and activities where the company has core competencies and distinctive competencies. Exhibit 1 Diversification Profiles of 33 Leading U. If, for example, you buy 30 stocks, all of whose issuers operate in the hotel industry, even the best of your stocks will be dragged down by a decline in business travel that results from increasing use of teleconferencing. investment cycle). 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). ) unrelated diversification e. Don't just say, "I'm the best candidate. For example, let's assume that you work for Company XYZ--a beverage company--and you have $1 million to invest. Of course, this risk is always possible among all kinds of firms. For example, Coca-Cola has had little need to diversify relative to the Virgin brand which traditionally operates in uncertain markets such as the volatile airline industry, meaning diversification actually spreads risk. Reliance entered into retailing by allocating Rs25, 000 crore in a phased manner is a typical example. Businesses are said to be "related" when. Divestment also serves as a means to undo diversification strategies. C) The company has superior strategic management and organizational design. 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. Unrelated Diversification is a outward appearance of diversification when the trade adds original or distinct / unrelated product position and penetrates new marketplace. 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 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. 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. All of the above All of the following are advantages of remaining in a single line of business except a. 5 / 5 ( 5 votes ) Walt Disney case study - Read the attached case study and answer the following questions. Or an extra large, an extra-extra large - and. is ordinarily described as diversification and it can be materialized through internal R&D, licensing, merger and acquisitions, joint ventures or alliances. a publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification. Companies, 1950-1986 Notes: Beatrice, Continental Group, General Foods, RCA, Scovill, and Signal were taken over as the study was being. MGT603 Strategic Management Solved MCQs Set 4 Print; View Comments. But still, in the long run, diversification strategy is one of the best growth strategy in the long run. Don't worry: Many new college graduates get writer's block when it comes to how to make a resume. Unrelated diversification is investing in different businesses or stocks whose prospects have low correlation. on StudyBlue. 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 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. The following are the types of diversification strategies: Horizontal Diversification. is a better indicator of competitive strength than is a simple percentage measure of market share--for instance, a company with a 20% market share is in a much stronger competitive position if its largest rival has a market share of 10% (which means its relative market share is 2. Investors often struggle to understand the complexity of diversified firms, and this can result in relatively poor performance by the stocks of such firms. The following are the main points from Chapter 6: Specify the components of sustainable competitive advantage and explain why it is important. 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. There are two main reasons to diversify: # diversification may benefit the firm's owners through increasing the efficiency of the firm # diversification decisions may reflect the preferences of. 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. Divestment also serves as a means to undo diversification strategies. In order words, related diversification leads to strategic fit which itself creates opportunities. Which of the following is the best example of unrelated diversification? A digital camera manufacturer acquiring a maker of athletic footwear Based on the info in Figure 8. This strategy of diversification refers to an entity offering new services or developing new products that appeal to the firm's current customer base. Luckily for Coca-Cola, its investment paid off—Columbia was sold to Sony for $3. If, for example, you buy 30 stocks, all of whose issuers operate in the hotel industry, even the best of your stocks will be dragged down by a decline in business travel that results from increasing use of teleconferencing. The animated movie Chicken Run is a feature-length example of related diversification. 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. A business diversifies by expanding into a new product or market. 4 billion. Understand what diversification is and when and howUnderstand what diversification is and when and how it it can enhance shareholder value. Of course, this risk is always possible among all kinds of firms. Exhibit 1 Diversification Profiles of 33 Leading U. C) vertical integration. Horizontal diversification can be seen in the following two forms - Concentric diversification and Conglomerate diversification. An electrical equipment manufacturer acquiring a potato chip company. Regularly entering into new niches and segments. A producer of men's apparel acquiring a maker of golf equipment. unrelated diversification B. Breakfast with Kellogg and magazine called "Joe with time" Directions and strategies of achieving unrelated Developments:. What is WaltDisney Company's corporate strategy? 2. So stop waiting. The new brand joins other better-for-you choices under the Hershey umbrella such as Brookside. 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 challenge in a fragmented industry is to figure out the best set of strategies to overcome a fragmented market so that the competitive advantages associated with pursuing one of the different business models can be realized. Which of the following is the best example of unrelated diversification? A. An industrialist building new plants in a country where operation costs are low. Form 990-W, "Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations," is a worksheet provided by the IRS to determine the amount of estimated tax payments required. C)work best when aimed at increasing the amount of the company's low-cost competitive assets and decreasing the amount of its high-cost competitive assets. There are two main reasons to diversify: # diversification may benefit the firm's owners through increasing the efficiency of the firm # diversification decisions may reflect the preferences of. An electrical equipment manufacturer acquiring a potato chip company. The Impact of Unrelated Diversification on Firm Value 1 Chapter 1. Which of the following is the best example of related diversification? a-A greeting card manufacturer deciding to open a chain of stores to retail its lines of greeting cards b-A producer of golf clubs and golf bags acquiring a maker of digital cameras c-An airline acquiring a rent-a-car company d-A manufacturer of ready-to-eat cereals. Answer to Which of the following companies are NOT examples of Unrelated diversification? a. First, an example using bullet points. Print Options. , - Successful. , 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. Northwest Airlines provides air travel for the public, whereas Procter & Gamble manufactures consumer goods. 13 “Unrelated Diversification at Berkshire Hathaway”). A business diversifies by expanding into a new product or market. Submitted for the IIM-A Consulting Blog Competition. The following graph shows how the efficient. Alphabet b. 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. a set of managerial decisions and actions b. related diversification: A process that takes place when a business expands its activities into product lines that are similar to those it currently offers. Firms may vary in the extent to which they diversify the mix of businesses they pursue, and this is usually decided by their relatedness. Diversification can be segmented into related diversification or unrelated diversification. Explanation: B) If the businesses are not similar, the strategy is called unrelated diversification. Political and legal influences can be costly in multiple ways. Which of the following is the best example of unrelated diversification? (1 point) a. Divestment can be especially appealing to executives in charge of firms that have engaged in unrelated diversification. ) related diversification d. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. Provide decreased profit margins for shareholders b. (Job Unrelated to Major) Many graduates find themselves in positions unrelated to their degrees or major. Concentric diversification occurs when a firm adds related products or markets. Launching Prepaid cards. Microsoft's corporate-level strategy: Related diversification Microsoft is a highly diversified company. This is a good example ofunrelated diversification, which occurs when a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries ("Unrelated Diversification at Berkshire Hathaway" [Image missing in original]). A cigarette maker diversifying into packaged food. 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. CHOOSING THE DIVERSIFICATION PATH: RELATED VERSUS UNRELATED BUSINESSES ♦ Related Businesses Have competitively valuable cross-business value chain and resource matchups. - 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. which of the following is the BEST example of unrelated diversification? a producer of men's apparel acquiring a maker of golf equipment. Since 2008, the firm has grown from around 50 employees to about 85 people. Unrelated diversification strategies surrender the competitive advantage potential of strategic fit and seek to add long-term shareholder value in four ways:. It has various unrelated business divisions including FMCG, Hotels, Paper & Packaging, Agribusiness etc. The animated movie Chicken Run is a feature-length example of related diversification. The goal of such diversification is to achieve strategic fit. Facebook; Twitter; LinkedIn; HERSHEY, Pa. Print Options. "The thought is that all your money should be put in your best investment ideas. A pizza chain acquiring a chain of hamburger outlets b. In companies pursuing a strategy of unrelated diversification, A. There are different approaches to diversification in the investment world. The Ansoff Matrix: 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?. A pizza chain acquiring a chain of hamburger outlets. - 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. · 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. affect quantity demanded only if candy is a normal good. But many successful companies, such as Tyco and GE, continue to buy unrelated businesses. This internal strategic factor is a weakness that limits business growth based on the rapid economic development of overseas markets. Porter maintains that achieving competitive advantage requires a firm to make a choice about the type and scope of its competitive advantage. A TV broadcasting company buying a Hollywood movie studio c. , - 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. The types are:- 1. makes video editing hardware for the television and movie industries. In 1983, the year after he was named president, Ohga set forth on his new business strategy of consolidation and diversification. Update (March 2, 2018): The company has responded with the following statement about its policy towards cheating: "Chegg does not tolerate cheating. The diversification of Apple - Pingdom Royal. The pros and cons of diversification. Related, Unrelated, and Multinational Diversification As Forms of Business Strategy Unrelated, and Multinational Diversification As. The rationale behind this technique contends that a portfolio constructed of different. A business diversifies by expanding into a new product or market. Related: Systematic risk. 5 / 5 ( 5 votes ) Walt Disney case study - Read the attached case study and answer the following questions. A supermarket chain acquiring an airline e. 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. Unrelated diversification involves no common strategic fit of the diversified firms lines of business. The main basis for competitive advantage and improved. Provide decreased profit margins for shareholders b. B)work best when they aim at lowering the costs of performing those tasks and activities where the company has core competencies and distinctive competencies. Facebook; Twitter; LinkedIn; HERSHEY, Pa. can be effectively eliminated by portfolio diversification. According to Strickland et al (2010), Diversification can be related or unrelated. Telling your story well will set you apart as an applicant and, most importantly, help you secure your dream internship or job. A producer of canned soups acquiring a maker of breakfast cereals Answer:b. However, the 'unrelated diversification' strategy is far from full proof and there are numerous examples in which it has failed for Virgin. on StudyBlue. c-Related diversification is particularly well-suited. 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 presence of cross-business value chain relationships and strategic fits. In this case there is no direct connection with the company´s existing business - this diversification is classified as unrelated. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. Question: Retrenching to a narrower diversification base: A. 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. The two molecules are unrelated. 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. B) concentration on a single business. none of these choices. A chain of radio stations acquiring TV stations B. Diversification strategy is observed when new products are introduced in a completely new market by the company. A producer of golf balls diversifying into camera manufacturing d. Breakfast with Kellogg and magazine called "Joe with time" Directions and strategies of achieving unrelated Developments:. For example, oil drilling and oil refining are highly correlated, related industries. This past quarter gave us a good glimpse at the power of Disney's diversification. 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. Answer to Which of the following companies are NOT examples of Unrelated diversification? a. The following figure summarizes where strategy formulation (strategizing) and implementation fit in the planning and other components of P-O-L-C. Divestment also serves as a means to undo diversification strategies. Please site at least 1. Given the widespread empirical phenomenon of diversification, it is not clear that corporate policies should encourage managers to focus solely on firm value. A producer of canned soups acquiring a maker of breakfast cereals In companies pursuing a strategy of unrelated diversification, A. Amazon's (Rare) Unrelated Diversification Strategy is a Worry. shift the demand curve for candy d. 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. That came despite it being a rough three months for a. Which one of the following is an example of unsystematic risk? E. 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. We would like to show you a description here but the site won’t allow us. on August 24, early product reviews were dismal. A pizza chain acquiring a chain of hamburger outlets. 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. According to Strickland et al (2010), Diversification can be related or unrelated. d) A steel producer acquiring a hardware store. As the diagram demonstrates, the matrix will give managers four possible scenarios, or strategies for future product and market. "The thought is that all your money should be put in your best investment ideas. Which of the following is the best example of unrelated diversification? A. Related Diversification Chrysler Unrelated Diversification Airline Industry 9. A Soap Company Launches A New Line Of Fragrance-free And Hypoallergenic Soaps B. Tesla suffers from limited market presence. ' 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. 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. Of course, this risk is always possible among all kinds of firms. The basic idea behind diversification is that the good performance of some investments balances or outweighs the negative performance of other investments. Unrelated Diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. Which of the following is the best example of unrelated diversification? A producer of men's apparel acquiring a maker of golf equipment. Butler and Domian (1991) is an early contribution to the decades-long debate on time diversification and portfolio risk. A diversified investment is a portfolio of various assets that earns the highest return for the least risk. Related diversification makes more sense than unrelated because the company shares assets, skills, or capabilities. Study 31 Ch 8 - Diversification Strategies flashcards from Taylor H. which of the following is the BEST example of unrelated diversification? a producer of men's apparel acquiring a maker of golf equipment. You've written hundreds of pages of papers, reports, and analyses over your academic career. What is WaltDisney Company's corporate strategy? 2. A Horse Farm Buys An Insurance Agency C. pursuing unrelated diversification. Political and legal influences can be costly in multiple ways. What makes it unsystematic is that only a few firms tend make the same mistake at the same time. Why do so many species occur in mountains? A popular but little-tested hypothesis is that tectonic uplift creates environmental conditions (new habitats, dispersal barriers, etc. For example, a dairy company producing cheese adds a new variety of cheese to its product line. affect the demand for candy through the income effect of a price change b. Assignment Questions: 1. In China's Hengduan Mountains region, a biodiversity hotspot uplifted over the last 8 million years, this rate does in fact show. which of the following is the BEST example of unrelated diversification? a producer of men's apparel acquiring a maker of golf equipment. 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. Luckily for Coca-Cola, its investment paid off—Columbia was sold to Sony for $3. ) related diversification d. When PepsiCo purchased Frito Lay Snackfood, this was an example of: A) diversification. Since 2008, the firm has grown from around 50 employees to about 85 people. , - 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. As controls, the equation includes one. Unrelated diversification means moving from what you were offering to a total new product. We will focus primarily on the strategy formulation aspects of strategic management because implementation is essentially organizing, leading, and controlling P-O-L-C components. affect the quantity demanded of candy through the income effect of a price change c. 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. Which one of the following is an example of unsystematic risk? E. For example, Coca-Cola has had little need to diversify relative to the Virgin brand which traditionally operates in uncertain markets such as the volatile airline industry, meaning diversification actually spreads risk. A Soap Company Launches A New Line Of Fragrance-free And Hypoallergenic Soaps B. A Restaurant Supply Company Buys A Chain Of Restaurants D. If the company. Divestment also serves as a means to undo diversification strategies. 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. According to Strickland et al (2010), Diversification can be related or unrelated. Amazon's (Rare) Unrelated Diversification Strategy is a Worry Diversification is a corporate strategy in which a firm brings multiple businesses within its boundaries. There are different risks inherent in each generic strategy, but being "all things to all people" is a sure recipe for mediocrity - getting "stuck in the middle". Which of the following is the best example of unrelated diversification? A producer of men's apparel acquiring a maker of golf equipment. Print Options. A TV broadcasting company buying a Hollywood movie studio c. 5 / 5 ( 5 votes ) Walt Disney case study - Read the attached case study and answer the following questions. Which of the following is the best example of related diversification? a-A greeting card manufacturer deciding to open a chain of stores to retail its lines of greeting cards b-A producer of golf clubs and golf bags acquiring a maker of digital cameras c-An airline acquiring a rent-a-car company d-A manufacturer of ready-to-eat cereals. all of the above. Which of the following is not a characteristic of strategic alliances entered into to support related diversification? a. Luckily for Coca-Cola, its investment paid off—Columbia was sold to Sony for $3. Which of the following is not one of the appeals of an unrelated diversification strategy? A. Under related diversification the company makes easier the consumption of its products by producing complementing goods or offering complementing services. During the past 25 years an increasing proportion of U. Which of the following is the best example of UNrelated diversification? a. The goal of such diversification is to achieve strategic fit. 1 which of the following would not be something to look for in identifying a diversified company's strategy?. In China's Hengduan Mountains region, a biodiversity hotspot uplifted over the last 8 million years, this rate does in fact show. Introduction Corporate diversification and its impact on firm value is a popular and widely discussed topic in literature, and can in general be divided into three categories: 1. 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. Diversification is a corporate-level strategy that can create value for an organization. consumer spending on entertainment decreased nationally. Related Diversification Unrelated Diversification The following set of slides explain the differences in detailBUSM 3200- Strategic Management (Jan 2013) GDS 6-32 33. A producer of canned soups acquiring a maker of breakfast cereals Answer:b. 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. The above image is an example of a conglomerate - ITC Ltd (based in India). Facebook; Twitter; LinkedIn; HERSHEY, Pa. 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. 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. ) corporate restructuring. B)work best when they aim at lowering the costs of performing those tasks and activities where the company has core competencies and distinctive competencies. d) A steel producer acquiring a hardware store. 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. Which of the following is not an example of when an organization should use an unrelated diversification strategy? a. Investors often struggle to understand the complexity of diversified firms, and this can result in relatively poor performance by the stocks of such firms. The following figure summarizes where strategy formulation (strategizing) and implementation fit in the planning and other components of P-O-L-C. Related: Systematic risk. A Horse Farm Buys An Insurance Agency C. Unfortunately, this industry is not well developed in India and the Indian labor force is not familiar with this type of manufacturing. , - Successful. Corporate Strategy - ITT. INTRODUCTION Diversification [dih-vur-suh-fi-key-shuhn], noun"Diversification is a form of corporate strategy for a company. have no effect on the demand for candy, because income is assumed constant along a demand curve e. d) A steel producer acquiring a hardware store. Unrelated diversification strategies surrender the competitive advantage potential of strategic fit and seek to add long-term shareholder value in four ways:. Even the stocks of trucking and airline companies move up and down together to some extent, as oil prices fluctuate. Which of the following is the best example of unrelated diversification? A producer of mens apparel acquiring a maker of golf equipment. Pinnacle Inc. 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. Study 20 Chapter 8 quiz flashcards from Jennifer E. 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. Focus Questions: 1. 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. c-Related diversification is particularly well-suited. In China's Hengduan Mountains region, a biodiversity hotspot uplifted over the last 8 million years, this rate does in fact show. 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. For example, the triangle Manufacturing Company, a fitness products maker, which is clearly unrelated to the firm's core products. Divestment also serves as a means to undo diversification strategies. Stability strategies 3. Introduction. Diversification can't protect investors entirely from risk. Introduction. Unrelated Diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. ) corporate restructuring. on StudyBlue. The company has broad organizational competencies that can be transferred. Diversification can be segmented into related diversification or unrelated diversification. Which one of the following is an example of systematic risk? A. C) vertical integration. The animated movie Chicken Run is a feature-length example of related diversification. The Ansoff matrix was invented by Igor Ansoff in 1965 and is used to develop strategic options for businesses. 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. For example, assume the following returns of two stocks of a diversified portfolio: If stock A has an average expected return of 5. The oil-company examples show that fit between parent and businesses is a two-edged sword. For example, let's assume that you work for Company XYZ--a beverage company--and you have $1 million to invest. Compared with the slew of other nifty new smartphones available today, critics groused that the onl. Different Types of Diversification Strategies. It aims to develop a wider range of products, markets, investments, etc. For example, any shareholder that holds the S&P 500 index would have shares in both Coca Cola and Pepsico. A pizza chain acquiring a chain of hamburger outlets b. C) The company has superior strategic management and organizational design. All of the above All of the following are advantages of remaining in a single line of business except a. Please site at least 1. the left-hand molecule contains two bromine atoms. Question: Which Of The Following Is An Example Of Unrelated Diversification? A. A newsprint manufacturer acquiring a chain of newspapers. Porter maintains that achieving competitive advantage requires a firm to make a choice about the type and scope of its competitive advantage. Expansion/growth strategies 2. Chapter 8 Learning Objectives 1. A good fit can create additional value; a bad one can destroy value. The Impact of Unrelated Diversification on Firm Value 1 Chapter 1. It can help improve your potential for investment success. Which of the following is the best example of unrelated diversification? A producer of men's apparel acquiring a maker of golf equipment. An electrical equipment manufacturer acquiring an athletic footwear company C. oriented to short-run performance of an organization c. Nike products are the typical example moderate-high, related constrained diversification. ) the attractiveness test (as it relates to a potential diversification move) b. But it does require a different approach when it comes to writing a cover letter. Strategic management is _____. The new will have no relationship to the company's technology, products or markets.