Chapter 13

Question 1

Four growth strategies

Answer 1

Diversification, product development, penetration, and market development strategy

Question 2

Diversification strategy

Answer 2

A strategy to grow by selling a new product to a new market.

Question 3

Product development

Answer 3

A strategy to grow by developing and selling new products to people who are already purchasing the firm’s existing products.

Question 4

Market Development Strategies

Answer 4

Strategy to grow by selling the firm’s existing products to new groups of customers.

Question 5

Penetration Strategy

Answer 5

A strategy to grow by encouraging existing customers to buy more of the firm’s current products.

Question 6

Backward integration

Answer 6

A step back (up) in the value-added chain toward the raw materials.

Question 7

Forward integration

Answer 7

A step forward (down) in the value-added chain toward the customers.

Question 8

Horizontal integration

Answer 8

Occurs at the same level of the value-added chain but simply involves a different, but complementary, value-added chain.