The Attractiveness Test for Evaluating Whether Diversification into a Particular

Multiple Choice

The attractiveness test for evaluating whether diversification into a particular industry is likely to build shareholder value involves determining whether

A) conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es) .
B) the potential diversification move will boost the company's competitive advantage in its existing business.
C) shareholders will view the contemplated diversification move as attractive.
D) key success factors in the target industry are attractive.
E) there are attractive strategic fits between the value chains of the company's present businesses and the value chain of the new business it is considering entering.