As noted in the Strategic Focus, Illinois Tool Works acquires small, low-margin but mature industrial businesses and restructures these businesses in order to improve profits. Illinois Tool Works is following a strategy of ____________ diversification.
A) related constrained
B) related linked
C) unrelated
D) dominant business

Question

Quizplus · Accepted Answer

The description of Illinois Tool Works' strategy indicates they acquire businesses that are unrelated to their current portfolio in order to improve profits. This fits the definition of unrelated diversification, making choice C the best answer. Related constrained diversification involves acquiring businesses that have tangible connections to the company's existing portfolio, while related linked diversification involves acquiring businesses that have some connections but also some differences. Dominant business diversification involves focusing on the company's most profitable and successful business while also investing in other businesses. None of these options accurately describe Illinois Tool Works' strategy.

As Noted in the Strategic Focus, Illinois Tool Works Acquires