Scenario D: A global cosmetics company called Eden Beauty is considering its corporate strategy. Several members of its board of directors believe they have the "perfect" strategy for the company. Dan believes that the best option is for Eden Beauty to stay on its current track of offering only organic cosmetics to customers who like organic products. Marta wants the company to expand by purchasing the manufacturing plants that produce the Eden Beauty products. Another director, Hector, wants to build the company by adding related products, such as skin care and perfume, to be sold alongside its current products. Finally, the original owner of the company, Keiko, wants to expand the company by doing something completely new, such as building restaurants or perhaps starting an entertainment park.
1. Which of the following corporate strategies does Marta favor?
A) Lateral diversification
B) Vertical integration
C) Conglomerate diversification
D) Concentration
E) Differentiation
2. A ________ strategy involves adding new businesses that produce related products or are involved in related markets and activities.
A) concentric diversification
B) lateral diversification
C) differentiation
D) concentration
E) conglomerate diversification
3. For the past two decades, Mama Lucia's has focused only on producing various pasta sauces in jars. The company is now considering entering the market for jarred pickles and olives as well. If Mama Lucia's decides to enter this arena, it would be using a ________ strategy.
A) differentiation
B) vertical integration
C) concentric diversification
D) cost competitive
E) functional