Internal new ventures are likely to be preferred when
A) entry barriers are high.
B) exit barriers are high.
C) a company possesses a set of valuable competencies in its existing businesses that can be leveraged to enter new business.
D) the company needs more mega-opportunities.
E) the industry is in the mature stage of the industry life cycle.

Question

Quizplus · Accepted Answer

Internal new ventures are more likely to be preferred when a company has a set of valuable competencies in its existing business that can be leveraged to enter new businesses. This allows the company to make use of its existing strengths, knowledge, and resources to enter new and related businesses. Additionally, this strategy may be preferred when entry barriers are relatively low, meaning that it may be easier to enter the industry through an internal venture than through acquisition or other means. Exit barriers and the stage of the industry life cycle are less relevant in determining whether internal venturing is the best strategy. The need for mega-opportunities is also not necessarily a determining factor, as there may be smaller opportunities that can be pursued through internal venturing as well.

Internal New Ventures Are Likely to Be Preferred When