When PepsiCo Purchased Frito-Lay and Expanded Its Operations into the Snack-Food

question 27

Multiple Choice

When PepsiCo purchased Frito-Lay and expanded its operations into the snack-food business, it was pursuing a ________ strategy.

• A)vertical integration
• B)market penetration
• C)diversification
• D)market development

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Definitions:

Expected Opportunity Loss

The anticipated loss in value for choosing an option that is not the best, quantified as the difference between the best expected outcome and the expected outcome of the chosen option.

Expected Monetary Value

The weighted average of all possible outcomes of a decision, where each outcome is weighted by its probability of occurrence.

Perfect Information

A theoretical situation in which all participants have access to all relevant information to make a decision.

Bayes Law

A principle stating the likelihood of an occurrence, grounded on previously known circumstances that may influence the event.