Diversifying into a New Industry by Forming a New Internal

Multiple Choice

Diversifying into a new industry by forming a new internal subsidiary to enter and compete in the target industry is attractive when

A) all of the potential acquisition candidates are losing money.
B) it is impractical to outsource most of the value chain activities that have to be performed in the target business/industry.
C) there is ample time to launch the new business from the ground up.
D) the company has built up a hoard of cash with which to finance a diversification effort.
E) none of the companies already in the industry is an attractive strategic alliance partner.