Case Scenario 1: Syco

question 69

Multiple Choice

Case Scenario 1: Syco.
Syco is a diversified company that has six primary lines of business. Fifty percent of its revenues and 18 percent of its profits come from retailing. Most of its retail outlets are discount department stores that serve as anchor tenants for large suburban shopping malls. The remaining businesses are broken out as follows: Insurance accounts for 30 percent of revenues and 50 percent of profits; consumer credit card operations are 6 percent of sales and 17 percent of profits; 5 percent of revenues and 6 percent of profits come from its stock brokerage business; commercial and residential real estate operations generate 4 percent of sales and 8 percent of profits; finally, 5 percent of revenues and 1 percent of profits come from its online portal business. The company's management states that all these businesses are essential to its competitive future.
-(Refer to Case Scenario 1) What diversification strategy best describes Syco? Assume that retailing, insurance, consumer credit card, stock brokerages, and online portal businesses allow for some transfer of knowledge about consumer behavior including buying and bill-paying habits.

• A) related constrained diversification strategy
• B) related linked diversification strategy
• C) unrelated diversification strategy
• D) combination diversification strategy

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Definitions:

Classification System

A system for organizing data or items into categories based on predefined criteria to facilitate understanding and analysis.

Sampled Unit

A specific element or set of elements selected from a larger population for the purpose of analysis or experimentation.

Content Analysis

A research method for studying documents and communication artifacts, which involves coding and analyzing texts or images.

Interview

A formal conversation where questions are asked and answers are given, usually for information gathering or assessment purposes.