Quiz 15 Corporate strategy - Corporate diversification

White Leo Motors (WLM) Inc. generates 70-95 percent of its revenues by manufacturing luxury sports cars. However, the company also derives an insignificant percent of its annual revenues by selling its sports merchandise that includes apparel, shoes, and other accessories under the same brand name. Which of the following terms best describes WLM?

A dominant-business firm

Which of the following companies will be considered as a conglomerate?

The Tata Group, active in industries such as tea, steel, IT, power, and automobiles

Symphon Times Inc., a Swiss-based premium watch brand, has recently started selling its watches through company-owned retail outlets in major cities of emerging nations. Which of the following types of diversification strategies is the firm pursuing?

Geographic diversification strategy

Marva Industries, a U.S.-based large conglomerate, competes in the hospitality, education, telecommunications, entertainment, airlines, and chemical industries. It currently operates in about 30 nations, and is planning to expand its portfolio by investing in rapidly developing countries. Which of the following strategies is Marva Industries pursuing?

Product-market diversification strategy

_____ is best described as the process of reorganizing and divesting business units and activities to refocus a company in order to leverage its core competencies more fully.

Restructuring

A _____ is best defined as a company that combines two or more strategic business units under one overarching corporation and follows an unrelated diversification strategy.

conglomerate

With reference to the Strategy Highlight 8.2, the Tata Group's corporate strategy is attempting to:

integrate different strategic positions, pursued by different strategic business units.

When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using _____.

related-constrained diversification

PepsiCo operates in many countries and sells a wide variety of carbonated soft drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth. From this data, we can conclude that PepsiCo has been involved in _____.

product-market diversification

WJ Group Inc., a large multinational conglomerate, had begun to experience declining revenues over the years. The top management at the headquarters of the company decided that it was important for the company to avoid deviating from its core competencies. Thus, a few of the company's key businesses like energy, telecommunications, and automobiles were centralized, giving the top management more control over them. Also, relatively newer businesses like beverages and food processing were divested. In this scenario, WJ Group is involved in:

restructuring