BSG BUSINESS GAME ACTUAL
EVALUATION PAPER 2026 SOLUTIONS
GRADED A+
⩥ Strategic options for improving the corporation's overall performance
include: Answer: • Sticking closely with the existing business lineup and
pursuing opportunities presented by these businesses
• Broadening the scope of diversification by entering additional
industries
• Retrenching to a narrower scope of diversification by divesting poorly
performing businesses that are no longer attractive or that don't fit into
managements long range plans
• Broadly restructuring the entire company by divesting some business
and acquiring others so as to put whole new face on the company's
business lineup
⩥ What to look for when determining a company's diversification
strategy is: Answer: o Is the company's diversification based narrowly in
a few industries or broadly in many industries?
o Are the businesses the company has diversified into related, unrelated
or a mixture of both?
o Is the scope of company operations mostly domestic, increasingly
multinational, or global?
o Any recent moves to strengthen company's positions in existing
businesses?
,o Any recent moves to build positions in new industries?
o Any recent moves to divest weak business units?
o Any effort to capture the benefits of cross business value chain
relationships?
o What is the company's approach to allocating investment capital and
resources across its present businesses?
⩥ Diversification always merits strong consideration at single business
companies when Answer: industry conditions turn sour and are expected
to be long lasting
⩥ There are four other instances in which a company becomes a prime
candidate for diversifying: Answer: o When its spots opportunities for
expanding into industries whose technologies and products complement
its present business
o When it can leverage existing competencies and capabilities by
expanding into business where these same resources strengths are key
success factors and valuable competitive assets.
o When diversifying into closely related business opens new avenues for
reducing costs.
o When it has a powerful and well-known brand name that can be
transferred to the products of other businesses and help drive the sales
and profits of such businesses to higher levels.
, ⩥ In principle, diversification into a new business cannot be considered
wise or justifiable unless Answer: it offers good prospects of added long
term economic value for shareholders
⩥ A move to diversify into a new business stands little chance of
producing added long term shareholder value unless it can pass three
tests: Answer: o The industry attractiveness test.
o The cost of entry test
o The better off test
⩥ Synergy Answer: creating added long term value for shareholders via
diversification requires building a multi-business company where the
whole is greater than the sum of its parts
⩥ Related businesses Answer: possess competitively valued cross
business value chain matchups
⩥ Unrelated business Answer: has dissimilar value chains containing no
competitively useful cross business relationships
⩥ Strategic fit Answer: exists when the value chains of different
businesses present opportunities for cross-business resource transfer,
lower costs through combining the performance of related value chain
activities, cross-business use of potent brand name, and/or cross-
business collaboration to build new or stronger competitive capabilities
EVALUATION PAPER 2026 SOLUTIONS
GRADED A+
⩥ Strategic options for improving the corporation's overall performance
include: Answer: • Sticking closely with the existing business lineup and
pursuing opportunities presented by these businesses
• Broadening the scope of diversification by entering additional
industries
• Retrenching to a narrower scope of diversification by divesting poorly
performing businesses that are no longer attractive or that don't fit into
managements long range plans
• Broadly restructuring the entire company by divesting some business
and acquiring others so as to put whole new face on the company's
business lineup
⩥ What to look for when determining a company's diversification
strategy is: Answer: o Is the company's diversification based narrowly in
a few industries or broadly in many industries?
o Are the businesses the company has diversified into related, unrelated
or a mixture of both?
o Is the scope of company operations mostly domestic, increasingly
multinational, or global?
o Any recent moves to strengthen company's positions in existing
businesses?
,o Any recent moves to build positions in new industries?
o Any recent moves to divest weak business units?
o Any effort to capture the benefits of cross business value chain
relationships?
o What is the company's approach to allocating investment capital and
resources across its present businesses?
⩥ Diversification always merits strong consideration at single business
companies when Answer: industry conditions turn sour and are expected
to be long lasting
⩥ There are four other instances in which a company becomes a prime
candidate for diversifying: Answer: o When its spots opportunities for
expanding into industries whose technologies and products complement
its present business
o When it can leverage existing competencies and capabilities by
expanding into business where these same resources strengths are key
success factors and valuable competitive assets.
o When diversifying into closely related business opens new avenues for
reducing costs.
o When it has a powerful and well-known brand name that can be
transferred to the products of other businesses and help drive the sales
and profits of such businesses to higher levels.
, ⩥ In principle, diversification into a new business cannot be considered
wise or justifiable unless Answer: it offers good prospects of added long
term economic value for shareholders
⩥ A move to diversify into a new business stands little chance of
producing added long term shareholder value unless it can pass three
tests: Answer: o The industry attractiveness test.
o The cost of entry test
o The better off test
⩥ Synergy Answer: creating added long term value for shareholders via
diversification requires building a multi-business company where the
whole is greater than the sum of its parts
⩥ Related businesses Answer: possess competitively valued cross
business value chain matchups
⩥ Unrelated business Answer: has dissimilar value chains containing no
competitively useful cross business relationships
⩥ Strategic fit Answer: exists when the value chains of different
businesses present opportunities for cross-business resource transfer,
lower costs through combining the performance of related value chain
activities, cross-business use of potent brand name, and/or cross-
business collaboration to build new or stronger competitive capabilities
