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:

Direct Method

A cash flow statement reporting approach that lists major outgoing payments and incoming receipts during a period.

Operating Activities

Activities directly related to the primary business operations of a company, including the production, distribution, and sale of goods and services.

Net Income

The total profit of a company after all revenues, expenses, taxes, and dividends have been deducted.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's profits.