Tanisha Is CEO of a Multinational Corporate Event Planning Firm

Multiple Choice

Tanisha is CEO of a multinational corporate event planning firm. What would make it unappealing to her to consider diversification into a new industry such as lodging by forming an internal startup subsidiary to enter and compete in the target industry?

A) when internal entry is cheaper than entry via acquisition
B) when a company possesses the skills and resources to overcome entry barriers and there is ample time to launch the business and compete effectively
C) when adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions
D) when the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms
E) when incumbent firms are likely to be slow or ineffective in combating a new entrant's efforts to crack the market