Three Approaches to Understanding Corporate-Level Strategy Are Portfolio Strategy, the BCG

question 53

Essay

Three approaches to understanding corporate-level strategy are portfolio strategy, the BCG matrix, and diversification. Write a short essay that explains each approach to corporate-level strategy. Identify which of the three approaches you think is most valid, and explain your rationale for your choice.

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Definitions:

Economic Loss

A situation where total costs exceed total revenues, resulting in a negative profit for a business or economy.

Short Run

A period of time during which at least one of a firm's inputs is fixed, affecting the firm's capacity to adjust to demand changes.

Short Run

The short run is a period in economics where at least one factor of production is fixed, limiting the adjustments a firm can make to its inputs.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it shows the cost of producing one more unit of output.