A firm that diversifies by exploiting its resources and capability advantages in its original business will have ________ costs than (as) firms that begin a new business without these resource and capability advantages, or ________ revenues than (as) firms lacking these advantages.
A) higher; lower
B) the same; higher
C) lower; the same
D) lower; higher

Question

Quizplus · Accepted Answer

Diversifying by exploiting existing resources and capabilities often results in lower costs because the firm can leverage its existing infrastructure and expertise. Additionally, this type of diversification can lead to higher revenues because the firm is able to use its existing advantage to create a competitive edge in the new market.

A Firm That Diversifies by Exploiting Its Resources and Capability