Question: 8 : 4 0 4 5 G: 8 3 ) Retrenching to a narrower diversification base a . has the advantage of enabling a company
:G: Retrenching to a narrower diversification base
a has the advantage of enabling a company to strive for better longterm performance by concentrating on building strong positions in a small number of core businesses and industries and avoiding the mistake of diversifying so broadly that resources and management attention are stretched thinly across many businesses.
b is usually the most attractive longrun strategy for a broadly diversified company confronted with recession or a slow growing economy, high or rising interest rates, mounting competitive pressures in several of its businesses, and onerous and costly government regulations.
cis usually the best strategy option for a broadly diversified company that is plagued with too little crossbusiness tinancial fit Se
dis a highly recommended strategic option for broadly diversified companies that have few competitively valuable resourcescapabilities and are struggling to capture both economies of scale and economies of scope in their present businesses.
e is a particularly appealing strategy for broadly diversified companies that have too few cash cow businesses to cover the losses and negative cash flows being incurred in its cash hog businesses.
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