Diversification into related industries is more likely to be profitable than diversification in unrelated industries:
A)Is a generally true statement
B)Is a false statement
C)Has never been tested
D)Is not supported by empirical evidence

Question

Quizplus · Accepted Answer

This statement is generally true because diversification into related industries allows a company to leverage its existing competencies and resources, potentially leading to synergies and cost savings. On the other hand, diversification into unrelated industries may require significant investments in new capabilities and resources, leading to higher risk and lower profitability.

Diversification into Related Industries Is More Likely to Be Profitable