Question

Which of the following is an advantage of pursuing an unrelated diversification strategy over a related diversification strategy?

a. There is greater coordination between business units.
b. Functional competencies would be useful in many different industries.
c. There are higher bureaucratic costs.
d. The company doesn't need coordination between business units.

Answer 1

Correct Answer:

b. Functional competencies would be useful in many different industries.

Step-by-step explanation:

This is because, the competencies of the organization could be useful leading to its application in many different industries. For example, a company into plastic manufacturing could diversify into electric bicycle manufacturing. Their competency in plastic manufacturing could come handy due to the parts of the bicycle being manufactured made up of plastics also.