Related and unrelated diversification (Connect, Perform)
Use your knowledge of diversification to answer the following questions.
1) Siemens is a large multinational company that has businesses in the energy and health care industries. Because these companies use different resources and do not produce similar products, Siemens is engaged in _____
a) single product strategy
b) unrelated diversification
c) vertical integration
d) related diversification
2) Which of the following would be the most sound rationale for The Walt Disney Company to pursue related diversification?
a) To acquire more creative talent in its film studios
b) To leverage the valuable Disney brand across multiple products and services
c) To operate more theme parks
d) To moderate the effects of the business cycle within a particular industry