exe3(student)

exe3(student) - Exercise 3 11 The attractiveness test for...

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Exercise 3 11. 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 are sufficiently attractive to permit earning consistently good profits and returns on investment. B) the potential diversification move will boost the company’s competitive advantage in its existing business. C) shareholders will viewed 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. 12. The cost-of-entry test for evaluating whether diversification into a particular industry is likely to build shareholder value involves A) determining whether a newly entered business presents opportunities to cost- efficiently transfer competitively valuable skills or technology from one business to another. B) determining whether the cost to enter the target industry will strain the company’s credit rating. C) considering whether a company’s costs to enter the target industry are low enough to allow for good profits or so high that potential profits would be eroded. D) determining whether the cost to enter the target industry will raise or lower the company’s total profits. E) determining whether the cost a company incurs to enter the target industry will raise or lower production costs. 13. The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves A) assessing whether the diversification move will make the company better off because it will produce a greater number of core competencies. B)
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exe3(student) - Exercise 3 11 The attractiveness test for...

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