Diversification ought to be considered when which?

1. a company's profits are being squeezed and it needs to increase its net profit margins and return on investment
2. a company lacks sustainable competitive advantage in its present business
3. a company begins to encounter diminishing growth prospects in its mainstay business
4. a company has run out of ways to achieve a distinctive competence in its present business
5. a company is under the gun to create a more attractive and cost-efficient value chain