DS & CoIs Following a Related-Linked Diversification Strategy, and GreenWing Inc

question 113

Multiple Choice

DS & Co.is following a related-linked diversification strategy, and GreenWing Inc.is following a related-constrained diversification strategy.How do the two firms differ from each other?

• A) GreenWing Inc. generates 70 percent of its revenues from its primary business, while DS & Co. generates only 10 percent of its revenues from its primary business.
• B) GreenWing Inc. pursues a backward diversification strategy, while DS & Co. pursues a forward diversification strategy.
• C) DS & Co. will share fewer common competencies and resources between its various businesses when compared to GreenWing Inc.
• D) DS & Co. pursues a differentiation strategy, and GreenWing Inc. pursues a cost leadership strategy, to gain a competitive advantage.

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Definitions:

Net Income

The amount of money left after all expenses, taxes, and costs have been subtracted from total revenue; a key indicator of a company's profitability.

Current Prices

Prices of goods, services, or assets at the current time, without adjustment for inflation.

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, thus in the process of being transported.

Consignment

A business arrangement where goods are left in the possession of another party to sell, but ownership remains with the supplier until sold.