Which of the following statements regarding diversification analysis is most accurate?
A) Companies should only use diversification analysis if they are well-established; new companies that use this process run the risk of trying to do too much too soon.
B) For any product, there is both a current and a new market and for any market, there is both a current and a new product.
C) Most companies discover that there is at least one product that is targeted to the wrong market.
D) Diversification analysis is only effective for consumer products.
E) Diversification analysis is used to forecast and calculate industry sales for new products.

Question

Quizplus · Accepted Answer

This statement accurately reflects the concept of diversification analysis, which involves examining potential opportunities in both existing markets and new markets, as well as for existing products and new products. Option A is incorrect because diversification analysis can be used by both new and established companies. Option C might be true in some cases, but it is not a universal truth. Option D is incorrect because diversification analysis can be used in any industry. Option E is also incorrect because diversification analysis is not used to forecast industry sales but rather to identify potential growth opportunities.

Which of the Following Statements Regarding Diversification Analysis Is Most