Which TWO of the following are sensible reasons for WRSX to avoid diversifying into new activities beyond its core marketing services?
A) There are no possibilities for economies of scope.
B) Research shows that unrelated diversification is negatively co-related with performance.
C) The potential for synergy is limited as the activities are not related.
D) Spreading risk across a wide range of activities reduces dependence on one market.

Question

Quizplus · Accepted Answer

Research has shown that unrelated diversification is negatively co-related with performance, and the potential for synergy is limited when the activities are not related. While there may be opportunities for economies of scope and risk reduction through diversification, these reasons alone may not be enough to justify pursuing new activities outside of the core marketing services.

Which TWO of the Following Are Sensible Reasons for WRSX