Question

The _________________ diversification strategy creates value in two ways. First, since the core competence has already been developed in one business, the firm does not have to allocate resources to develop it. Second, since the resource is intangible, competitors cannot easily imitate it.

a. related constrained
b. unrelated
c. related linked
d. dominant business

Answer 1

The related linked diversification strategy creates value in two ways: not having to allocate resources to develop a core competence and preventing competitors from easily imitating the resource.

Step-by-step explanation:

The correct answer is related linked. The related linked diversification strategy creates value in two ways. First, since the core competence has already been developed in one business, the firm does not have to allocate resources to develop it. Second, since the resource is intangible, competitors cannot easily imitate it.

Answer 2

The related constrained diversification strategy utilizes a company's core competency across multiple businesses, saving resources and providing a competitive edge since this intangible asset is tough for rivals to copy.

Step-by-step explanation:

The related constrained diversification strategy creates value in two ways. First, it leverages a company's core competency across multiple businesses or product lines without the need to allocate additional resources to develop that competence further. Second, since the core competence is based on intangible resources such as knowledge, brand reputation, or company culture, it is not easily imitated by competitors, providing a competitive advantage.

A related constrained strategy implies that the different businesses share significant links in terms of their value chain activities. This can result in cost savings and create a synergy across the businesses that are part of the corporation.