Strategic Management

Related diversification: Occurs when a firm moves into a new industry that has important similarities with the firm's existing industry or industries. Because films and television are both aspects of entertainment, Disney's purchase of ABC is an example of related diversification.

77. 
    Give recent examples of joint venture, retrenchment, divestiture, and liquidation
    

Joint Venture: The best example of a Joint venture is between Starbucks Corporation and Tata Global Beverages. Starbucks Corporation, a chain store of the USA serving coffee and such other drinks, pre-packaged foods, and evening drinks. It is famous for its coffee throughout the globe.
Retrenchment: Retrenchment is defined as cutting back or a reduction. An example of retrenchment is a company laying off employees to get back within budget.
Divestiture: A partial or full disposal can happen, depending on the reason why management opted to sell or liquidate its business' resources. Examples of divestitures include selling intellectual property rights, corporate acquisitions and mergers, and court-ordered divestments.
Liquidation: The process of selling off assets to repay creditors and distributing the remaining assets to the owners. In other words, liquidation is the process of closing a business, paying off creditors, and giving the investors whatever is left over.

77. 
    Do you think hostile takeovers are unethical? Why or why not?
    

It can best be argued that hostile takeovers are ethical. Usually, only weak companies face hostile takeovers, and, typically, shareholders and customers of the company benefit from the new organization. From this angle, some of you may argue that hostile takeovers are unethical.

77. 
    What are the major advantages and disadvantages of diversification?
    

Major advantages:
Minimizes the risk of loss to your overall portfolio.
Exposes you to more opportunities for return.
Safeguards you against adverse market cycles.
Reduces volatility.