3M leverages its competencies in adhesives technologies to many industries,including automotive,construction,and telecommunications.This is an example of creating value by using
A) related diversification to acquire economies of scope by leveraging pooled negotiating power.
B) unrelated diversification to financial synergies through portfolio management.
C) related diversification to acquire economies of scope by leveraging core competencies.
D) unrelated diversification to parenting, restructuring, and financial synergies through restructuring and parenting.

Question

Quizplus · Accepted Answer

Firms may diversify into related businesses. Here, the primary potential benefits to be derived come from horizontal relationships, that is, businesses sharing intangible resources (e.g., core competencies such as marketing) and tangible resources (e.g., production facilities, distribution channels). In this case, 3M leverages its core competencies in adhesives technologies in many industries to attain economies of scope.

3M Leverages Its Competencies in Adhesives Technologies to Many Industries,including