Scenario C

question 18

Multiple Choice

Scenario C. Use the information given below to answer the following questions. Shine cosmetics, a global company, is considering its corporate strategy. Several people on the board of directors believe they have the "perfect" strategy for the company. Joe believes that the best option is to continue their present strategy of offering cosmetics to customers who like the "look" of the products. Martin wants the company to expand by purchasing the manufacturing plants that produce Shine products. Cathy wants to add products like skin care and perfume to the product line. Ruth wants to develop the company by opening restaurants or setting up an amusement park.
-Which of the following corporate strategies does Cathy advocate?

• A) Concentration
• B) Vertical integration
• C) Related diversification
• D) Unrelated diversification
• E) Price skimming

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Definitions:

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision, representing the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Extracting

The process of obtaining raw materials from the natural environment for use in the production of goods or services.

Selling

The act of offering goods or services in exchange for money, involving strategies and processes to persuade customers to make a purchase.

Time-Value

Time-value represents the concept that money available at the current time is worth more than the same amount in the future due to its potential earning capacity, emphasizing the importance of time in finance.