ConAgra,a Diversified Food Producer,increases Its Power Over Suppliers by Centrally

question 37

Multiple Choice

ConAgra,a diversified food producer,increases its power over suppliers by centrally purchasing huge quantities of packaging materials for all its food divisions.This is an example of using

• A) related diversification to acquire economies of scope by leveraging pooled negotiating power.
• B) related diversification to acquire market power by leveraging pooled negotiating power.
• C) unrelated diversification to acquire financial synergies through portfolio management.
• D) unrelated diversification to acquire parenting, restructuring, and financial synergies through restructuring and parenting.

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Definitions:

Infant Industries

Newly established industries that are often protected by the government from international competition until they become competitive.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity can produce it.

Opportunity Costs

The loss of potential gain from other alternatives when one particular option is chosen over others.

Predatory Dumping

A practice where a company exports a product at a price significantly lower than its normal value, with the intention to drive out competition in the import country.