One strategic fit-based approach to related diversification would be to
A)diversify into new industries that present opportunities to transfer specialized expertise, technological know-how, or other valuable resources and capabilities from one business's value chain to another's.
B)diversify into foreign markets where the firm has unrelated businesses.
C)acquire rival firms that have broader product lines so as to give the company access to a wider range of buyer groups.
D)acquire companies in forward distribution channels (wholesalers and/or retailers).
E)expand into foreign markets where the firm currently does no business.

Question

Quizplus · Accepted Answer

The strategic fit-based approach to related diversification involves diversifying into industries where the firm's existing expertise, resources, and capabilities can be transferred to create value for the new business. This approach allows the firm to leverage its existing strengths and create synergies between its different businesses, leading to improved performance and competitiveness. Option A states this approach explicitly, making it the best choice. Options B, C, D, and E do not emphasize the importance of strategic fit and are therefore not the best choices.

One Strategic Fit-Based Approach to Related Diversification Would Be to