Financial ManagementMCQQuestion 5533 of 217
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11. Entering into business of manufacturing of Robots can best be described as:

Options

ABackward vertical integration
BCo-generic diversification
CConglomerate diversification
DDivestment (2 Marks)
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Correct Answer

Option CConglomerate diversification

All Options:

  • ABackward vertical integration
  • BCo-generic diversification
  • CConglomerate diversification
  • DDivestment (2 Marks)

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Detailed Solution & Explanation

Correct Answer: Option **C**

**Explanation:**
Diversification strategies involve entering new product markets. They can be related or unrelated:
- **Conglomerate diversification** (or unrelated diversification) occurs when a firm enters a new business that has no linkage, relationship, or commonality with the firm's existing product, technology, or market.
- In the case scenario, M/s. ABCD Ltd. is a company formed by professionals specializing in AI, Blockchain, Cloud Computing, and Data Mining services. The Board decides to enter the business of manufacturing Robots. The case explicitly states: "The company knows that there is no linkage between existing and proposed business with specific reference to product or market or technology."
- Because there is no technological, product, or market overlap or synergy between their existing IT/consulting services and Robot manufacturing, this diversification is classified as **Conglomerate diversification**.

Hence, **Option C** is the correct answer.

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