Showstopper Inc. dominates the ladies' wig market and wants to expand into men's toupees. How can Showstopper's managers determine whether the company should develop a toupee division internally, ally with a toupee maker, or acquire a toupee-making firm?
A. Unless the market for toupees is booming, Showstopper should stick to what it knows and focus on creating the best ladies' wigs in the industry.
B. The managers need to determine whether the skills needed to create wigs and toupees are similar and whether Showstopper creates better hairpieces than its competitors do.
C. The managers must determine whether wig making and toupee making require substantially different skills. If so, the company should pursue internal development.
D. To protect themselves, Showstopper's managers should choose the option that leads to the largest company with the most managerial positions.
Answer: B
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