Value-neutral reasons and value-increase reasons for firm

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Reference no: EM131626847

Sports Inc. has developed a shoe to compete with Air Jordans. In order to keep up with competitors and minimize competitor market power, the firm decides to sell branded sports equipment as well. By introducing another new business so soon outside of its shoe products, the firm stands to lose value. Sports Inc.'s reason for diversifying itself is to:

a. neutralize another firm's advantage by acquiring a similar distribution outlet.

b. decrease another firm's advantage by acquiring a similar distribution outlet.

c. increase its value by acquiring a similar distribution outlet as a competitor.

d. decrease another firm's value by acquiring a different distribution outlet.

What is the distinction between value-neutral reasons and value-increase reasons for a firm to diversify?

a. Value-neutral reasons seek to help the firm develop a more competitive position, whereas value-increase reasons seek to serve the managers of the firm.

b. Value-neutral reasons seek to serve the managers of the firm, whereas value-increase reasons seek to establish a more competitive position.

c. Value-neutral reasons seek to improve the firm overall, whereas value-increase reasons seek to establish a more competitive position.

d. Value-neutral reasons seek to help the firm develop a better competitive position, whereas value-increase reasons seek to improve the firm overall.

Reference no: EM131626847

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