A Strategy Based on Diversification May Fail to Add Value

Multiple Choice

A strategy based on diversification may fail to add value because companies:

A) seek to achieve differentiation instead of low cost.
B) diversify into areas in which they have some knowledge and miss out on profitable opportunities in other areas.
C) make acquisitions rather than develop new technologies on their own.
D) incur bureaucratic costs that exceed the value created by the strategy.
E) seek to achieve a low-cost position instead of differentiation.