chapter 9 corporate diversification

Question 1

4 corporate level strategies

Answer 1

1. vertical integration
2. corporate diversification
   3.strategic alliances
3. mergers and acquisitions

Question 2

corporate diversification strategy

Answer 2

when a firm operates in multiple industries or markets simultaneously

Question 3

3 types of diversification

Answer 3

• Product Diversification:
  – operating in multiple industries
• Geographic-Market Diversification:
  – operating in multiple geographic markets
• Product-Market Diversification:
  – operating in multiple industries in multiple geographic
  markets

Question 4

Limited Diversification

Answer 4

Single Business Firms: These firms get more than 95% of their revenue from one main business. They focus almost entirely on that business (like Company A in the diagram).

Dominant Business Firms: These firms earn 70-95% of their revenue from one main business but have some minor involvement in other areas (like Companies B and C).

Question 5

Related diversification

Answer 5

Related-Constrained Diversified Firms: These firms get less than 70% of their revenue from any single business. All of their businesses are closely related and share resources, like technology or marketing (shown as D, E, F, and G).

Related-Linked Diversified Firms: These firms also get less than 70% of their revenue from one business, but their businesses are only partially related. They share some resources but not as much as related-constrained firms (like Q, R, S, and T).

Question 6

Unrelated Corporate Diversification

Answer 6

Unrelated Diversified Corporation: These firms have less than 70% of revenue coming from any one business, and their businesses are entirely separate. There’s little to no overlap in resources or markets (like U, V, W, and X).