Question

The two biggest drawbacks or disadvantages of unrelated diversification are

 

A)underemphasizing the importance of resource fit and the strong likelihood of diversifying into businesses that top management does not know all that much about. 

B)insufficient cash flows to finance so many different lines of business and a lack of uniformity among the strategies of the businesses it has diversified into. 

C)volatile sales and profits and making the mistake of diversifying into too many cash cow businesses.

D)the difficulties of competently managing many different businesses and being without the added source of competitive advantage that cross-business strategic fit provides. 

E)over-investing in the achievement of economies of scope and the difficulties of achieving a good mix of cash cow and cash hog businesses.